WASHINGTON (dpa-AFX) - Disruption in the Strait of Hormuz has exposed the vulnerability of global trade to a single maritime choke point, with early data showing sharp falls in exports of energy, fertilizers and industrial products.
Exports of natural gas dropped by a staggering 95 per cent, according to an analysis published by the International Trade Center, a multilateral agency that has a joint mandate with the World Trade Organization and UN trade and development body.
The Strait, located south of Iran, is responsible for around one quarter of global seaborne oil trade and a significant share of liquefied natural gas flows and fertilizers, including a third of globally traded urea.
Since the Middle East war broke out in late February, reduced commercial passage, concerns over navigational safety and higher transport and insurance costs have affected trade flows far beyond the region.
Although recent lulls in the fighting have raised hopes that shipping could resume more fully, traffic remains far below normal levels.
The analysis focuses on 12 strategically important energy, fertilizer and industrial products for which major global suppliers depend on Hormuz.
This group comprises Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates.
Trade data for April reveals that combined merchandise exports across all products from these economies declined by 21 per cent in value.
However, that export values are also affected by sharp movements in international commodity prices triggered by the disruption itself, the ITC noted. Therefore, changes in physical quantities provide complementary evidence on the extent of the disruption to actual trade flows.
Across all 12 products, combined export volumes declined by 54 per cent, with liquefied natural gas recording the steepest contraction, 95 per cent.
Urea exports declined by 83 per cent, followed by methanol (80 per cent) and ammonia (75 per cent). Polymers of propylene, or polypropylene, used for plastic packaging in consumer goods - were the least affected, with its exports declining by 24 per cent.
The largest absolute losses were in energy products such as crude petroleum oil exports, which fell by 28 million tons, followed by refined petroleum oils and liquefied natural gas, which declined by 7.3 million tons and 5.5 million tons, respectively
'Sizeable falls in fertilizers, chemicals, plastics and aluminum show that the disruption affected a broader range of industries and supply chains,' the authors of the analysis noted.
Meanwhile, importing markets were not affected in the same way, depending on factors such as reliance on Hormuz suppliers, access to inventories and strategic reserves, domestic demand and ability to source from alternative suppliers.
Japan, for example, historically sourced 91 per cent of its crude petroleum oil imports from Hormuz-dependent economies. In April, the country recorded a 64 per cent decline in total imports. Other highly dependent markets such as South Korea and Malaysia faced the same situation.
In contrast, Thailand recorded a 62 increase as refiners moved to secure additional cargoes from alternative suppliers and maintain supplies during the disruption.
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