Global Economy Is Suddenly Fighting an Energy Stranglehold on Three Fronts – WSJ
Global Economy Is Suddenly Fighting an Energy Stranglehold on Three Fronts – WSJ
Conflict in the Middle East broadened this week with Tehran-backed Houthi militants turning tankers back from the Bab al-Mandeb strait. The Red Sea maritime chokepoint, which has become the biggest export route for Saudi Arabia’s crude following the Strait of Hormuz closure, accounted for roughly 12% of the world’s seaborne oil flows before the war.
Another disruption: Ukraine has mounted sustained attacks on Russian energy infrastructure and ships in the Black Sea. A barrage of strikes in the waters near the port of Novorossiysk, which handles nearly a third of Russia’s oil exports, paused flows through a pipeline that delivers Russian and Kazakh oil to the Black Sea.
The closing of the three chokepoints collectively imperils roughly a quarter of the world’s oil supply and provides a fresh test of the ability of energy-hungry economies to adapt.
Oil is at the heart of two major conflicts consuming the world’s attention. Iran’s ability to starve the world of supply from the Gulf has emerged as its most potent form of leverage against the U.S. Ukraine has increasingly disrupted Russia’s energy exports and domestic fuel markets, giving Kyiv unexpected momentum in the four-year-old conflict.
