Attempts to broker peace between the United States and Iran now seem to be collapsing as both sides are unable to reach a consensus on any agreement.
Indeed, the differences between the two nations are too vast. If tensions escalate and a full-blown war breaks out once again, the already strained global supply chain will be severely disrupted.
In such a situation, the issue will not be confined to rising petrol and diesel prices. Experts warn that the danger is likely to affect what's on your plate. In fact, the world may soon face a humanitarian crisis that's truly concerning.
Saudi Aramco CEO warns, "If war breaks out…"
Issuing a stern warning, the President and CEO of Saudi Aramco, Amin H. Nasser, said the world is currently facing the biggest energy supply shock ever. According to him, even if the situation improves, it will take months for the market to regain its previous position. However, if war breaks out and is delayed, its severe consequences could be felt until 2027.
Impact on agriculture
Modern agriculture largely depends on fertilizers. A supply disruption in the Gulf will affect fertilizer production and distribution. The United Nations Office for Project Services (UNOPS) has expressed concern that if a resolution is not reached within the next few weeks, it would result in a global humanitarian crisis.
A double blow to poor countries
This war would be catastrophic for nations that rely heavily on other countries to fulfil their food requirement. In the event of war, no country would risk exporting grain and prioritize feeding its citizens first, eventually leading to a massive grain shortage in the global market.
Once full-scale conflict breaks out, the situation in the Strait of Hormuz is expected to further worsen. Shipping forms will be hesitant to transport goods through such high-risk routes. Even if they decide to proceed, the insurance and freight costs will be too high for common people to afford food.