IEA Chief Warns Global Economy Faces New Risks If Hormuz Strait Disruption Not Resolved Within Weeks

According to Lianhe Zaobao citing Reuters, International Energy Agency (IEA) Executive Director Fatih Birol said on Wednesday that the global economy will face new challenges if the conflict disrupting passage through the Strait of Hormuz is not resolved within weeks. Speaking at the Aspen Security Forum in Colorado on July 15, Birol noted that market sentiment is tense and facing 'enormous uncertainty' as escalating attacks by both sides threaten the transport of oil, fertilizer, natural gas, and other goods through the key waterway. Over the past week, the number of observable vessels transiting the Strait of Hormuz has significantly decreased following attacks on ships and the reimposition of a US blockade on Iranian shipping. After a supertanker was attacked, Saudi Arabia's oil loading volume in the Persian Gulf dropped sharply. Meanwhile, the International Maritime Organization (IMO) warned that the current conditions in the strait remain too dangerous for commercial shipping. The US military launched a second wave of strikes against Iran on Wednesday to weaken Iran's military capability to threaten vessels in the Strait of Hormuz. Iran emphasized that the Strait of Hormuz is a pillar of its national security and that it must maintain its established arrangements in this vital waterway. Birol warned that if the Strait of Hormuz remains closed, global economies, including those in the region, developing countries, and Asian nations, could face difficulties again. He stressed that the strait must be 'fully and unconditionally opened' within weeks, not months. He noted that while the disruption of energy and raw material supplies from the Persian Gulf has already impacted economies such as South Korea and Japan, countries like Bangladesh, Pakistan, and India are more vulnerable to such supply disruptions.