Fears grow about a new energy crisis
Fears of another possible energy nightmare, which will again test fragile economies, are looming across Europe after the escalation of hostilities in the Middle East.
The possibility of an all-out war in a region that represents a third of the world’s oil production now constitutes a real threat to the global oil market and is increasing the risk of fresh disruptions in global value chains, rising energy and food prices, as well as transport costs, leading to higher inflation and lower growth rates. The consequences of such a development for energy-poor Europe and much more for highly energy-dependent economies, such as Greece, will be painful.
An Israeli strike on Iran’s energy facilities could, analysts say, push oil prices back to $100 a barrel, as Iran accounts for 4% of global supply. The price of Brent oil registered a rise of 5% last Thursday, when Joe Biden said that the US is discussing whether to support possible Israeli attacks on Iranian energy infrastructure.
An even worse-case scenario sees an Iranian counterstrike on Israel’s energy infrastructure and a possible closure of the Strait of Hormuz, through which over 20% of the world’s oil supply passes.
