Middle East Conflict Exposes Global Fossil Fuel Dependence
The ongoing conflict in the Middle East has exposed the world's dependence on fossil fuels, particularly oil and gas. The Straits of Hormuz, a critical shipping lane, has been blockaded since the US and Israel attacked Iran, causing Brent crude prices to surge by 60% to $110 per barrel.
The effects are far-reaching, with Asia and Europe being highly exposed to fuel shortages. Rationing has already begun in several countries, with the International Energy Agency (IEA) advising that people work from home to conserve fuel. Australia is also experiencing panic buying, a sign of how widespread the impact will be.
Oil and gas underpin the production of essential resources like fertiliser, helium, and pharmaceuticals. Fertiliser, for example, relies on sulphur and urea, both of which are heavily dependent on Gulf oil and gas. The region supplies 44% of global sulphur and one-third of world urea production.
India has cut output from three urea plants, while Bangladesh has shut four out of five. China is restricting exports, leaving the US with only 75% of its usual fertiliser supply at this time in the agricultural cycle.