Sitharaman on Iran war threatening global energy arteries and how it’s impacting India<\/a><\/p>\nThere are two factors that simply cannot be ignored.<\/p>\n
1. The Strait of Hormuz remains effectively closed to the majority of vessels.<\/p>\n
2. Any negotiations to end the conflict and re-open the strait \u200bhave failed so far, and the \u200brhetoric from the main players suggests little imminent hope of a breakthrough.<\/p>\n
Trump said that Iran can be “taken out” if it doesn’t re-open the strait, and used expletives in a social \u2060media post.<\/p>\n
His threats to rain “hell” on Iran came after he appeared at the weekend alongside a person in an Easter Bunny costume \u200bat the White House, where he veered between talking about egg supply to threatening to destroy Iran’s bridges and power plants.<\/p>\n
If there is an image that encapsulates \u200bthe lunacy of the current situation, it’s the president of the United States standing next to a mythical children’s character related to a religious celebration of eternal salvation while threatening to destroy another country.<\/p>\n
It’s little surprise that Iran has so far rejected ceasefire overtures, given the violent threats deployed by Trump and the visible build-up of U.S. military forces in the region, not to mention his track record of abandoning agreements.<\/p>\n
RISKS ABOUNDWhile there may still be an off-ramp from the threatened escalation, the risk remains that more facilities in the Gulf will be attacked and damaged.<\/p>\n
Iran has so far managed to hit Qatar’s LNG and gas-to-liquids plants, as well as refineries and infrastructure in the United Arab Emirates, Kuwait, Bahrain and Saudi Arabia.<\/p>\n
The Strait of Hormuz is too risky for most ship owners to consider passage, and the few vessels that are going through are believed to be doing so with Iran approval, and after payment of a toll to Tehran.<\/p>\n
Trump has effectively three options left.<\/p>\n
1. Walk \u200caway from the mess he has created while trying to spin the conflict as a win.<\/p>\n
2. Escalate dramatically and run the risk of a long conflict with massive damage to the Gulf’s energy infrastructure and the resulting severe global energy crisis and recession.<\/p>\n
3. Accept a ceasefire and a negotiated settlement that will likely be more favourable to Iran than what existed prior to the start \u200bof the conflict on February 28.<\/p>\n
The \u200bthird is probably the one that will be least harmful \u2060to the world economy, but it seems the least likely given the statements and actions of the parties involved.<\/p>\n
The impact of having to lower global crude and refined products demand by around 10% of current levels won’t be evenly spread around the globe and it won’t all come at once.<\/p>\n
Poorer countries in Asia and Africa will take the first hits as they struggle to both source and pay for refined products.<\/p>\n
Rather than turn inwards, governments across the globe should \u200bbe working together to work through the crisis.<\/p>\n
But they have to recognise the gravity of the situation.<\/p>\n
The U.S. administration and its president appear disconnected from reality and are now acting in ways that harm the interests of traditional allies.<\/p>\n
The main impacts of the crisis are likely to be felt in May as refiners, especially in Asia, struggle to source crude.<\/p>\n
The second-round effects such as higher inflation, lower global trade, job losses and social unrest are likely to emerge in the second half of the year.<\/p>\n
The views expressed here are those of the author, a columnist for Reuters.<\/p>\n","protected":false},"excerpt":{"rendered":"LAUNCESTON, Australia: The U.S. and Israeli war against Iran has been characterised by a series of miscalculations by…\n","protected":false},"author":2,"featured_media":368076,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,42942,219,192930,108018,169108,111,139,69,25033,93496,2179],"class_list":{"0":"post-368075","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-crude-prices","10":"tag-economy","11":"tag-iran-energy-crisis","12":"tag-iran-news","13":"tag-iran-war","14":"tag-new-zealand","15":"tag-newzealand","16":"tag-nz","17":"tag-oil-prices","18":"tag-strait-of-hormuz","19":"tag-trump"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/368075","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=368075"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/368075\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/368076"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=368075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=368075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=368075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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