The Strait of Hormuz conflict is impacting global trade, with Europe and Asia facing severe economic challenges, according to the Washington Post.
The conflict in the Strait of Hormuz is disrupting global trade and hitting Europe and Asia harder than the United States, reports the Washington Post.
Rising shipping costs, energy shortages, and financial market turmoil are spreading far beyond oil and gas.
Iranian missile and drone attacks have paralyzed ocean and air traffic through the Gulf, closing airports including Dubai and idling nearly one-fifth of global airfreight capacity. Shipments of electronics, pharmaceuticals, and metals have been interrupted, while tanker traffic through the strait has fallen by 90 percent.
Air cargo costs from Asia to Europe have surged by 45 percent, more than double the rise on Asia-US routes. Economies such as Italy, Belgium, China, India, and South Korea, heavily reliant on Gulf energy, are facing inflationary pressures and supply chain strains. QatarEnergy's liquefied natural gas production has been shut down, raising fears of a bidding war for supplies.
Financial markets in Asia have been hit harder than Wall Street. South Korea's stock market fell by 20 percent before a mild rebound, while India's rupee dropped to a half-century low against the dollar. Analysts warn that prolonged conflict could strain government finances across Asia.
Container shipping is also snarled, with 57 vessels trapped in the strait and carriers such as Maersk suspending new bookings in Gulf states. MSC stated that cargo would be diverted to 'next safe ports,' leaving goods stranded and storage costs mounting. Drone strikes on Oman's Salalah port and airports in Azerbaijan have added to the disruption.
Airlines are rerouting flights around Iranian and Russian airspace, reducing capacity and driving jet fuel prices up by 72 percent since the war began. Logistics executives have compared the crisis to pandemic-era disruptions, warning that backlogs in Asia and Europe could worsen if hostilities continue.
