At the first shot in the Strait of Ormuz, “Impact will feel quickly” in Portugal

By 53.5 km that separate Iran from Oman pass 20.1 million barrels of oil per day. In other words, every 24 hours there are 1.29 billion of € of oil. And the sensitive Strait of Ormuz became even more delicate after the US attack on Iran

Iran again threatened to close the, where more than 20% of all maritime trade from. Therefore: When would time take the first explosion of a underwater mine or the shooting of a land-mane missile in that area to rise the price of fuels at Portuguese stations? “The impact will feel very quickly,” says the executive president of the Portugal Transit Association (APAT), António Nabo Martins, anticipating that any event in Ormuz is immediately sitting in the weekly increase in fuel prices.

“This is the question of one million euros. But in a way, it has happened. The block has not happened, but the price of fuel in Portugal has already started to increase this Monday – and in a considerable way,” explains António Nabo Martins.

The CEO of APAT – the entity that represent, supports and regulates the interests of international transport and logistics companies in Portugal – ensures that, in the face of an attempt to block Iranian, what will happen “immediately” is a “transition to another alternative route and this will have costs”.

António Nabo Martins believes that all the oil that is already in transit should not be affected by an increase in price, because the merchandise is already contracted and inflating the cost would be against “commercial ethics”, but “all loads that from that moment are impacted by this block will surely suffer considerable increases.” However, the expert emphasizes that during “this type of disruptions, ethics also tends to get a little back.”

But a note of relief (until seeing): helps ethics and everything else reassured after all the fear that there was before this ceasefire. But, and even seeing, it’s just a cease-creation. Or a slowing down.

ORMUZ, the narrow without an alternative

Without Operational Ormuz Strait, the logistics expert recalls that there is no more sea alternative and transport “all those tons of air oil would be completely absurd.”

“The alternative would have to be terrestrial,” says António Nabo Martins, and “many of the existing routes would also be impacted by all the conflict on land and even by the situation in Ukraine/Russia.”

In addition to all this, the CEO of APAT recalls that this would be a “alternative that is not fast” and “such a process means that there will be less availability of fossil fuels.”

António Nabo Martins explains that so far the conflict between Israel and Iran – even after the US attack – has not yet impacted merchant circulation between the Persian Gulf and Oman’s Gulf, as had happened with the attacks of the Houthis of Yemen rebels against Western boats in Bab Al -Mandab. “Then there was a brutal impact, the ships had to take a much larger way and that impacted the price.”

The APAT leader acknowledges that land transportation of oil in that area of ​​the globe with two conflicts near the routes is not the perfect solution and that “we will probably have to go looking for fuels on the other side.”

“We have not yet been able to be sustainable without the oil derivatives and therefore we will have to go looking for somewhere. And these somewhere, taking that area of ​​the globe where the most oil is produced and obviously we do not have the Russian either, is the American side,” he explains.

“Recently there were analysts who said it was very difficult to close the Strait of Ormuz, but – and I apologize for my expression – I think everything is crazy.” Repeating the outburst: “The only word I have for this is that this is crazy, complete madness. I want to believe it won’t happen, at least not 100%because it will have an impact worldwide.”

Among so many doubts, APAT’s executive president says there is only a certainty about the conflict in the Middle East, the Strait of Ormez and the recent US direct involvement: “All this will impact the prices of consumer goods and people’s wallet.”

The importance of Ormuz

The Strait of Ormuz is so important to the sea trade of oil that has been labeled as “the world’s main bottleneck.” US Department of Energy Data show that about 27% of all world sea trade of oil is passed through that Arabian sea route that separates Oman and the United Arab Emirates of Iran, as well as the Persian Gulf of Oman’s Gulf.

Of the ten world’s largest exporters of oil and derivatives, five of them are Saudi Arabia, Iraq, United Arab Emirates, Kuwait and Iran itself. All situated in the Persian Gulf. All dependent on the Strait of Ormuz. According to the International Energy Agency (IEA), by 2022 this hand full of Middle East countries exported about 1 billion tons of cross and derivatives. And, in financial terms, the Observatory of Economic Complexity (OEC) shows that these same countries – except for Iran, due to lack of data – had a sales volume of 352 billion euros in 2023 alone.

The scenario may be complicated for the global economy, but it is possible to find some historical comfort in the past: “The Strait of Ormuz was never closed,” an example of this was what happened in the 1980s during a war between Iran and Iraq, where the Iranian threat was the same and was never fulfilled. This was remembered by Robert Yawger, director of Energy Futures of Mizuho Securities, to CNN International after the same region caused by interference from missiles fired against Israel last week.