How the rest of the world is struggling with the economic crisis that Trump and Netanyahu triggered
As the United States wages war with no clear endgame, large swaths of the globe are suffering worse than Americans from the economic fallout, weathering gasoline shortages, falling currencies and more severe energy shocks.
Iran’s retaliatory attacks have largely blocked the Strait of Hormuz, turning the transit point for one-fifth of the world’s crude into a trial by fire for cargo ships and sending oil prices soaring. That is triggering hikes at the pump — on average by 23.6 percent for Americans. That’s worse than much of Europe, where gasoline prices were already far higher. But it’s less painful than the 39.5 percent spike in Nigeria, 32.9 percent hike in Laos or 31.8 percent jump in Australia, according to GlobalPetrolPrices.com.
There is no repeat in America of the gas shortages that plagued the United States in the 1970s. But they are already hitting countries in Asia. Thailand ordered civil servants to work from home while panic buying causes gas pumps to run dry in some areas. Bangladesh and other nations have begun rationing fuel. To conserve precious fuel stores, Sri Lanka and the Philippines have taken the extraordinary step of moving some workers to a four-day workweek.
The shortages and price surges are set to worsen as a fresh escalation of attacks by both sides on major energy fields threatens a new phase in the war. A key benchmark of global oil prices — Brent crude — climbed to around $115 a barrel on Thursday.
“We are victims of a war that is not of our choosing,” Philippines President Ferdinand Marcos Jr. declared this month.
For much of the world outside the U.S., the problem isn’t just gasoline prices.
The bottleneck in the strait, as well as fresh Israeli strikes in Iran and Iranian reprisals on Qatar — a major producer of natural gas — have sent liquefied natural gas prices soaring well into the double digits in Europe and Asia, both net importers. European prices on Thursday surged to their highest level since the war began. That’s slamming energy-intensive companies including Italian paper producers and German chemical makers. Yet because natural gas prices are less globalized than oil, the competitors of European companies in the U.S. — the world’s largest gas producer — have enjoyed relatively stable prices since the war began.
Nearly one-third of key fertilizer components arrive from the Middle East, and the war is stalling shipments and creating shortages. That’s bad news for American farmers, but worse for poorer nations such as Sudan, Tanzania and Sri Lanka that are relatively more reliant on supplies from the Middle East. The United Nations World Food Program warned Tuesday that nearly 45 million more people could fall into acute food insecurity if the conflict does not end by summer and oil prices remain above $100 a barrel. [Continue reading…]