Hormuz Reopening Would Offer Relief for Asia, but Economic Scars Will Remain
A potential U.S.-Iran agreement to reopen the Strait of Hormuz would offer near-term relief for Asia, the region outside of the Middle East that has borne the brunt of the economic fallout from the monthslong war.Even so, the shock waves of the crisis are likely to ripple through the end of the year, and possibly well beyond.Over the past three-and-a-half months, currencies across Asia have plummeted, inflation has surged, and supply-chain bottlenecks have begun to choke industrial production.The disruptions trace back to Asia’s heavy reliance on energy and other commodities that move through the Strait of Hormuz.
More than four-fifths of the petroleum and liquefied natural gas transiting the waterway is typically bound for Asian markets.On Sunday, President Trump said in a social media post that an interim cease-fire agreement reached by Washington and Tehran would reopen the strait, and that he had authorized “the immediate removal of the United States Naval blockade” on Iranian ports.The deal is scheduled to be signed on Friday.“Ships of the World, start your engines,” he wrote.
“Let the oil flow!”If an agreement to reopen the strait holds, it will provide an immediate reprieve, freeing hundreds of tankers laden with oil, gas, and fuel byproducts to begin making the monthlong journey back to Asian ports.Still, industry experts and economists caution that because trade flows have been disrupted for so long, global markets will need considerable time to normalize — meaning elevated inflation and supply-chain strains are likely to linger through the end of the year.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....