Escalating hostilities in the Middle East risk renewed energy, inflation shocks: Moody’s

Key Highlights

• Media reports suggest the conflict has effectively closed the Strait of Hormuz, a key conduit for global energy flows.
• Roughly one-third of the world’s seaborne crude oil exports and about 20 per cent of liquefied natural gas shipments transit the narrow waterway.
• India, the world’s third largest oil importer, imports roughly half of its oil needs through the narrow Strait.
• “This (closure of Strait of Hormuz) raises the risk of further disruptions in the Red Sea and across the wider Middle East,” Moody’s Analytics said.
• “Airspace closures have compounded the strain, affecting passenger travel and cargo flows through one of the world’s most important trade corridors.” Asia is particularly exposed as it buys the lion’s share of oil and gas produced in the region.