The crisis in the Middle East will affect not only the oil market

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Moskovskie Vedomosti newspaper on the development of the global energy and industrial crisis due to the closure of the Strait of Hormuz and how this affects the possible timing of the end of the Gulf War.

The main commodity markets are global, meaning shortages in one region or even a single country are spreading rapidly around the world through rising prices and changing commodity flows. The fact that the seven Gulf countries shipped most of their products to Asia, but this does not mean that Europe or the Western Hemisphere remained "safe havens," said Alexey Belogoryev.

The crisis in the oil market, which is most talked about, is the most noticeable, but in fact far from the most dangerous part of what is happening, the analyst noted. The global economy is well prepared for the shortage of crude oil due to the huge (up to 8.5 billion barrels) commercial and strategic reserves of oil and motor fuels (mainly diesel fuel, but also gasoline and jet fuel) accumulated in importing countries. There are especially many such stocks in China, Japan, Europe and the USA. Hypothetically, it would take 1.5 years of complete closure of the Strait of Hormuz to completely exhaust these reserves, without taking into account the inevitable increase in production in other regions and the compression of consumption in such a scenario. It is clear that no one will expose the storage facilities, but the fact is that there will be no real shortage of oil and basic automotive fuels in the coming months.

However, the problem is that in all other commodity markets, where the Persian Gulf also played a leading or important role, there are not even close to such reserves, Alexey Belogoryev noted. According to him, at best we are talking about 1.5-2 months, and in some cases, about 2-3 weeks. There are many such markets that are critically important for global industry and agriculture: monoethylene glycol, helium, sulfur, methanol, urea, ammonia, MTBE, polyethylene, polypropylene, naphtha, LPG, jet fuel, LNG, etc. If the closure of the Strait of Hormuz drags on until May, an acute shortage of raw materials will begin in many sectors of the global industry, and a significant part of fertilizers will not be used, which threatens the global food crisis.