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Following US and Israeli strikes, this week Iran moved to block the Strait of Hormuz, the ultimate geopolitical chokepoint connecting the Persian Gulf to the open ocean.
Let’s investigate the economic impact.
Do you have a car? Twenty million barrels of oil squeeze through this narrow strait every single day, representing roughly 20% of the global supply.
As drone attacks halt major shipping, global oil prices have surged. This means immediate price hikes at the petrol station and rising supermarket inflation, since shipping everyday goods will cost more.
And what about your house? Because the Strait of Hormuz is not just for oil. A massive portion of global LNG relies on this route.
Following the attacks, Qatar halted its LNG facilities, sending European gas prices skyrocketing. And since Europe needs this gas for heating and electricity, expect higher household bills.
Finally, the timing could not be worse for Europe, as the continent now relies on shipped LNG. But European reserves are dangerously low, and a sustained blockade would leave the EU exposed to sharp price spikes.
Climate groups argue this crisis exposes the true vulnerabilities of a world chained to fossil fuels. They are pushing for a faster shift to home-grown renewables to escape these geopolitical shocks.
However, until that energy transition happens, it seems this tiny maritime chokepoint will dictate the cost of living for all of us.
Watch the Euronews video in the player above for the full story.
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