Strait of Hormuz: The American and Israeli attacks on Iran and Tehran’s blockade of the Strait of Hormuz in response have created problems for the entire world. The situation is that global oil reserves have reached the lowest level in 8 years.

According to a recent report by Goldman Sachs, where the world had 105 days of oil stock in February, it has now come down to 101 days. It is expected to fall for 98 days by the end of May.

Oil reserves are decreasing rapidly

Since the end of February, that is, since the war in Iran started, more than 100 crore (1 billion) barrels of oil have been used from reserves around the world. At present, there is a shortage of 10-13 million barrels of oil every day at the global level. As far as India is concerned, at present only 3.37 million tonnes of crude oil is left in the country’s Strategic Petroleum Reserve (SPR).

The sharp decline in inventory has worried both the government and the energy market. Due to closure of Hormuz for almost two months, supply of more than one billion barrels has been damaged so far. Now if it remains closed for a few more days, the situation may go from bad to worse. Let us tell you that Hormuz is a very important ‘check point’ of the world, through which about 20 percent of the global oil trade and 20 percent of the LNG passes.

Experts gave warning

According to a Bloomberg report, experts and international agencies like IEA and IMF have given serious warnings. They say that if Hormuz remains closed till September, crude oil prices may reach $167 to $200 per barrel.

Due to energy shortage and rising prices, the world’s GDP may suffer a loss of more than Rs 3.5 lakh crore. This may also cause food crisis in the coming 6-7 months because gas is used in making fertilizer. Apart from this, the prices of ship insurance and freight transportation can also increase exponentially.

JPMorgan has also warned that if Hormuz remains closed further, the OECD inventory could reach ‘operational stress level’ as early as next month and is expected to fall to ‘operational minimum’ level by September.

Which countries are most at risk?

• India imports 88 percent of its oil and 80 percent of LPG requirement. Due to stoppage of supply, there is a danger of severe shortage of fuel in India and increase in inflation.
• China, Japan and South Korea are also completely dependent on the Gulf countries for their energy needs. The energy security of countries like Japan and South Korea directly depends on this route of Hormuz.
• Bangladesh and Pakistan are also not free from danger. There are already long queues at petrol pumps here. Amidst the severe shortage of fuel, these countries are facing difficulties in producing electricity. In such a situation, there is a possibility of industrial production coming to a halt.

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