International politics has essentially and very clearly demonstrated the economic importance and the enormous influence energy has over the world economy. This observation is occasioned by the ongoing conflict and tension in the Gulf region, by the escalated tussle with a show of military might and warfare capabilities by the leaderships of the Islamic Republic of Iran, versus Donald Trump’s United States of America’s intimidating show of military strength; especially over who will control the Strait of Hormuz. The venomous power tussle that arose as a result of the obliteration of Iranian energy plants, military assets and nuclear plant facilities by the joint strikes of the Israelis and the USA on 28 February 2026, sparked off the retaliation unleashed by the Iranians, including this strategic struggle to close and stop commercial shipping and passage of oil tankers (vessels, along with LNG carriers) that operate along the global energy supply value chain.
The Strait of Hormuz is vital to international energy security and world trade, being geographically, the most critical oil chokepoint. This is regarded as a hotspot for military patrols by the US Navy and other nations, where a minimum of 20 percent of global oil consumption passes with high volume of traffic on a daily basis. It is the primary energy route for oil and liquefied natural gas (LNG) exports from Saudi Arabia, the UAE, Kuwait, Iraq, Qatar and Iran, to the rest of the world. The military tensions around this waterway make this oil chokepoint a strategically vital spot that spontaneously influences global energy pricing (through the international politics being engaged in by the affected interests; hence, the price fluctuations of oil and gas at the international oil market since the Gulf region conflict erupted in Iran. The significant impact of this war of attrition is the global risk of subjecting the entire world into a crashing international economy through a crisis of energy scarcity by the already disrupted global energy supply chain that affects the entire energy consumption needs with its attendant devastating consequences. This imminent global economic risk of energy scarcity with very unstable soaring prices, global food insecurity and hunger could however, be put under control if there could be a quick resolution to end this Israeli-US war on Iran.
The defining moment to avert widespread hunger globally, however, requires an immediate shift from the ongoing disruption of commercial shipping, oil tankers and LNG carriers; to restore normalcy on passage of tankers and cargo vessels through the Strait of Hormuz. This strategic check (if achieved) will further counter the imminent threat of a global food insecurity that is looming. This will also put the adverse socioeconomic impact under control. The hiccups already manifesting from the disturbed global energy flow adversely affect a seamless global food production value chain. This hinges on the disrupted flow of energy substrates for fertiliser manufacturing plants to meet farmers’ needs in the agricultural sector, especially in Europe. These observable impacts obviously affect the entire global economic outlook. This situation is capable of disorganising the global socioeconomic equation where the global energy supply system experiences energy scarcity with soaring prices that would poorly support global energy demands for a normal global consumption volume.
The bottom line is the cost of energy, globally. The tension in the Gulf is already affecting energy availability, exacerbated by Iran’s closure of marine traffic for passage of oil tankers, LNG carriers, and cargo vessels through the Strait of Hormuz. Energy consumers globally therefore, are confronted and saddled with this global challenge, alongside energy accessibility and affordability for various economic and commercial operations internationally. Various economic sectors are presently grappling with high energy costs and energy scarcity, to power their several industrial and commercial operations (in fishing, farming, in fertilizer production, in various modes of transportation, even for domestic consumption in homes for heating and cooking).
In all economies presently, the high cost of energy consumption is threatening sustainable economic activities in every clime, globally. This could get worse if the tension in the Gulf region is not quickly resolved to give normal passage of marine traffic at the Strait of Hormuz. In the international oil market, this singular disruption could ground many economies (with mounting financial crises), globally. In Nigeria, the impact is already affecting all aspects of commercial activities; and the ordinary citizens in the country bear the brunt most; although, even “the rich also cry”.
- business a.m. commits to publishing a diversity of views, opinions and comments. It, therefore, welcomes your reaction to this and any of our articles via email: comment@businessamlive.com
