DALLAS: The world may need to find a way to get by on less oil and gas if the Strait of Hormuz remains closed much longer due to the US-Israeli war on Iran, Dallas Federal Reserve President Lorie Logan says.
Iran has throttled shipping through the strait during the three-month conflict, forcing up energy, food and fertiliser prices.
Around a fifth of the world’s oil and liquefied natural gas transited the narrow waterway before the war.
“If shipping through Hormuz does not soon return to pre-war levels, world oil and natural gas consumption could need to fall more meaningfully than it has so far,” Logan said yesterday.
“The economic consequences would depend on the degree to which end users can switch to other energy sources or use energy more efficiently, versus curtailing economic activity. I expect energy markets to come into rough balance before too long,” Logan added. — Reuters
