Hormuz Strait Closure May Soon Lose Its Bite for Iran
The Strait of Hormuz, a critical waterway for global oil and gas trade, has been closed since February this year due to ongoing tensions between Iran and its adversaries. The closure, initially seen as a significant blow to Iran's economy, may soon prove otherwise.
Oil prices skyrocketed in the immediate aftermath of the war, reaching above $100 per barrel, but have since fallen. Despite this, the economic impact on Iran has been substantial, with consumer prices rising 90% year-on-year and food inflation reaching a staggering 130%. Unemployment is also increasing.
The closure has provided an opportunity for alternative routes to be developed, including a new pipeline in the UAE that will double its export capacity. The US is reportedly backing efforts to revive an Iraq-Syria pipeline, while Saudi Arabia is considering expanding its current pipeline.