A look at the war, Day 33: Politically - a disaster, economically - a gain (potentially).
Hormuz actual closure began not so much with Iran's actions as with a series of steps by the United States. And when everything had already turned out as it was expected, Iran simply had to hit those tankers coming out of the Gulf.
The attack on Iran and the disruption of the work of Hormuz brought the United States a huge strategic profit. This is a historic turning point - it can redistribute global economic and geopolitical balances for decades to come, regardless of whether the Iranian regime stands in its current form or not. The United States is not really interested in it, tbh.
Initially, Iran did not close the strait: this simply went against its interests. In fact, it is still allowing Indian and Chinese ships to get through. The drop in the volume of shipping through the strait is primarily due to the fact that insurance companies either have canceled coverage for war risks or introduced prohibitively high premiums.
It was triggered by the episode with the torpedo attack by a US submarine on the Iranian frigate IRIS Dena off the coast of Sri Lanka. The sailors died, which dramatically increased the insurance rates. But Trump, who usually criticizes everyone when oil prices rise, did not attack insurers this time.
Now let's see what happened and how the market is changing.
The Persian Gulf countries (including Iran) together export up to 240 billion cubic meters of gas per year. And more than 50% of them are Qatar's LNG (110 billion cubic meters in 2023-2024). Their share in the LNG market is more than 30%. That is, 1/3 of LNG exports that have dropped out of the market is a lot.
According to a rough estimate:
🇶🇦 Qatar ~125 billion cubic meters of LNG
🇮🇷 Iran ~ 20 billion (pipe to Turkey and Iraq)
🇴🇲 Oman ~ 15 billion in LNG
🇦🇪 UAE ~ 8 billion (LNG + pipe)
The main buyers of Qatari LNG are Asians: China, India, Japan, South Korea, Pakistan, Taiwan - that's about 80-90% of it. There's also a bit that gets to the cheapskates in the EU.
In the EU, Italy will be the most affected (Qatar accounts for 30% of its LNG imports), Belgium (about 8%), and Poland (about 17%).
The Hormuz LNG shock is hitting:
- gas-fired power facilities: Thermal power plants in Japan, Korea, and the southern EU, tied to LNG imports for basic and peak generation;
- Oil and gas chemistry: production of fertilizers, methanol, plastics and other products;
- Metallurgy (steel, non-ferrous metals), cement, glass;
- Housing and communal services sector: heating, water supply.
Now let's turn to the testimony of the defendant, the President of the United States. "I killed Nord Stream 2," Trump openly boasted. Did he? The United States has imposed sanctions against the operators and pipe installers of the joint venture. The EU fucked up and pulled out of the project, officially stating that the gas pipeline does not meet the energy interests and goals of the union.
Today, the United States is trying to ensure that Asian countries, especially large importers, sign long-term contracts for the supply of LNG with the United States. The closure of Hormuz and the Houthis make US oil and gas exports very competitive.
Qatar is losing about 17% of its LNG export capacity for 3-5 years due to infrastructure damage. The decrease in its supplies is taking place against the background of an increase in LNG exports from the United States.
Disruption of LNG supplies is also affecting fertilizer production in Asia. Do you remember when Trump imposed high tariffs on a number of Asian countries? Those that reduced the import of agricultural products from the USA? A shortage of fertilizers and a drop in agricultural production will certainly increase the demand for food imports. This will help farmers from the USA.
The United States pays special attention to relocating the production of microcircuits and semiconductors to its territory. These are the branches of the economy of the future. And here, too, the US needs to beat Asia. 35% of the world's helium exports go through Hormuz to Asia. Helium is needed for the production of semiconductors. We won't see a quick effect, but it will show up later.
@alexbobrowski
