We all know the economic consequences of engaging in war between one country and another and how things can escalate to an extent beyond measure, we are going to look into the economic effects of Iran blocking strait of hormuz, you can read further from the Reuters report on this
Iran vows to attack any ship trying to pass through Strait of Hormuz and we know if the standstill continues like this, the effect on global economy may trigger more inflation ahead the existing challenges and this will lead to escalated scenario with other countries using this route for their oil supply.
We all know the importance of oil in every country and how the mobility is, from within the Middle East/GULF countries, Straight of Hormuz serves as a narrow passage through the border of Iran down to many countries in which have their vessels pass through that same route for oil supply, we also see how the price of oil rises early hour of Monday this week because of the mountain tension that more possible delay could hold at Strait of Hermuz.
https://x.com/i/status/2028029212490404277Let's try to compare some of the impacts that we are going to experience if this should continue and oil vessels were unable to grant access through this single route for oil supply to many countries.
Some of the Major Oil Exporting Countries Concerned Iraq
UAE
Saudi Arabia
Kuwait
Qatar
Iran
Economic Consequences in Blocking the Strait of Hormuz 1. Inflation, this of course is a result of an increase in oil prices as major suppliers experience a surge because of the denied access and thereby inflating the prices they charge and this goes around to every marketer across the world.
2. There may be escalating war with countries like China, India, Japan, and North Korea because this is a global challenge and Europe and Asian parts will mostly be affected because of their dependence on energy supply through this route.
3. Escalating war, there could be a mount of military action against Iran over blocking strait of Hormuz as other countries would not take it lightly to retaliate and engage in military combat.
Yes, it is a problem for the global economy, as 30% of the world's oil production goes to markets via the Strait of Hormuz. Yes, it will be a big problem. But I think it will lead to active growth in production in other countries, such as Venezuela and some African countries. Not quickly, but very likely. Who will suffer? The global economy, the economies of the Persian Gulf countries. And... CHINA. China receives up to 40% of its oil through Hormuz. China will not receive oil from Venezuela. I am also not sure that China will be given priority in oil supplies from African countries such as Namibia, Nigeria, Uganda, and Ghana—they are more oriented toward contacts with the West and the Western market, and China's presence there is either absent or minimal because these countries have not allowed themselves to be trapped by “Chinese investments,” which are essentially aimed at high-level theft of countries' resources by China.
China's only “oil friend” in Africa is Angola, where China has poured billions of dollars into a model of “loans -> infrastructure -> inability to repay loans -> access to resources,” but this country is already the largest supplier of oil to China and is unlikely to be able to significantly increase supplies.
In short, it's an interesting picture for China: on the one hand, it has been feeding Iran, and on the other hand, Iran is “biting the hand that feeds it” by cutting off its access to critically important oil
