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Iran Threat to Close Strait Could Hurt Economic Recovery
Nearly one-fifth of the world's traded oil passes through the Strait of Hormuz, much of it destined1 for Asian and European nations.
Lucian Pugliaresi at the Energy Policy Research Foundation says any attempt to block the shipping2 route could send oil markets into a frenzy3. "If there were an action by Iran to close the Strait of Hormuz, we would probably see an initial spike4 of oil prices, who knows, $40, $50, $60 a barrel," he said.
With fuel demand rising in China and other emerging nations, the severity and length of higher fuel prices would depend largely on how long the Strait remained closed, and whether other oil producing countries stepped in to fill the demand.
"The real issue here is that we are part of a highly integrated world oil market and that a disruption in any place in the world causes consequences everywhere in the world," said Pugliaresi.
The latest round of European sanctions includes freezing Iranian assets and banning its oil imports to Europe. Iranian lawmakers responded Monday by renewing threats to shut down the strategic route.
Many Western analysts5 believe Iran is bluffing6, but Pugliaresi is not so sure. Oil accounts for 80 percent of Iran's foreign revenue, about 2 million barrels of oil per day. "Once you close the Strait of Hormuz and then once you take action to open it up, there's no telling what the Iranians might do. They may engage in a lot of what's called asymmetric7 responses, which could add to a lot of turmoil8 in the Middle East," said Pugliaresi.
The United States has warned it will not allow Iran to close the Strait. However, the threat of a blockade has already sent U.S. gasoline prices to a 12-month high.
Pugliaresi says instability in many of the world's largest oil producing nations is adding to economic uncertainty9 for consumers, and could derail an already weak global recovery. He says it also underscores the need for the U.S. to greatly expand its domestic energy production.
1 destined | |
adj.命中注定的;(for)以…为目的地的 | |
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2 shipping | |
n.船运(发货,运输,乘船) | |
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3 frenzy | |
n.疯狂,狂热,极度的激动 | |
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4 spike | |
n.长钉,钉鞋;v.以大钉钉牢,使...失效 | |
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5 analysts | |
分析家,化验员( analyst的名词复数 ) | |
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6 bluffing | |
n. 威吓,唬人 动词bluff的现在分词形式 | |
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7 asymmetric | |
a.不对称的 | |
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8 turmoil | |
n.骚乱,混乱,动乱 | |
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9 uncertainty | |
n.易变,靠不住,不确知,不确定的事物 | |
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