by Craig Hemke, Sprott Money:
Iran War Economic Impact: How Middle East Conflict Is Reshaping Global Supply Chains
As the war in Iran stretches into its seventh week, the global economic impact increases by the day. These impacts are direct in terms of energy prices but increasingly indirect as nations around the world adjust their trade policies and prepare for supply squeezes and shortages.
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Crude Oil Prices Surge 40–50%: Energy Markets Under Pressure
Crude oil and energy prices have been top of mind since the Iran War began on February 28. Crude oil prices are up 40-50% in the six weeks since, and this price ripples across almost all sectors as higher energy prices lead to higher production costs, which in time are passed along as higher prices to consumers.
But it’s the secondary impacts that are the most worrisome as it’s not just crude oil that flows out of the Middle East via the Persian Gulf and Strait of Hormuz. Global agriculture and food supply is threatened by a drop in urea and fertilizer production:
Fertilizer Production at Risk as Strait of Hormuz Disrupts Global Urea Supply
A shortage of helium will have a deleterious impact on the global semiconductor and tech industries:
Helium Shortage Threatens Global Semiconductor Manufacturing
And a drop in supply of precursor chemicals will impact the global supply of plastics too:
