We spoke with Hakan Çendik, co-founder of Angora Shipping, about the impact of the situation in the Strait of Hormuz on maritime transportation and global supply chains.
As the Strait of Hormuz is one of the most critical chokepoints for global energy and commodity trade, the closure of the strait by Iran due to the conflict between Iran, Israel, and the US has begun to have very serious effects on maritime transport and global supply chains, which the world’s economies have started to feel from day one. The contraction in energy supply, along with freight costs, supply chain issues, and insurance problems, will translate into additional costs for all global economies.
Since a significant portion of the region’s oil and gas trade is conducted via maritime transport, the closure of the Strait of Hormuz to global oil and LNG trade has rapidly impacted freight and insurance costs. Consumers have begun to feel these costs as early as the first week.
Since approximately 20 percent of global oil trade passes through this strait, the sudden surge in oil prices and resulting energy shortages will affect not only economies but all vital activities; the costs arising from this domino effect will lead to global inflation and recession.
Since the situation in the Strait of Hormuz has already affected all nations worldwide, the geopolitical and war-like climate must be urgently addressed through global diplomacy to bring an end to the conflict. Otherwise, military intervention by US and Western navies could escalate the conflict from a regional to a global war.
Whether the Strait of Hormuz is resolved through diplomacy or war will be the world’s most critical test in the new century. The winner -and especially the loser- of this war will not be a single party.
The responses of sensible and compassionate societies will produce solutions that politicians have failed to achieve.