TEXAS \u2013 The global economy faces a renewed challenge if the conflict that has choked the Strait of Hormuz is not resolved in a matter of weeks, said International Energy Agency executive director Fatih Birol.<\/p>\n
\u201cMarkets are nervous\u201d and grappling with \u201cbig uncertainty\u201d due to an escalation of attacks from both sides that threatens to disrupt shipments of oil, fertiliser, natural gas and other cargoes through the key waterway, Birol said in an interview on the sidelines of the Aspen Security Forum in Colorado on July 15.<\/p>\n
Visible traffic through the strait has thinned markedly over the last week as vessels were attacked and the United States reimposed its blockade of Iranian shipping. Saudi Arabian oil loadings from inside the Persian Gulf have slumped in the wake of strikes on supertankers, while the International Maritime Organization has said the waterway remains too dangerous for commercial vessels to transit.<\/p>\n
\u201cIf the Strait of Hormuz remains closed we may again have some difficulty for global economies, including those in the region and developing nations and Asia,\u201d Birol said. \u201cIt is not months, it is weeks\u201d after which the strait needs to be \u201cfully open, unconditionally open\u201d, he said.<\/p>\n
Although the disruption to Persian Gulf energy and feedstock deliveries has impacted economies such as South Korea and Japan, countries like Bangladesh, Pakistan and India are far more vulnerable to such cut-offs, Birol said.<\/p>\n
Pakistan\u00a0bought its most expensive liquefied natural gas (LNG) spot shipment in four years, as renewed hostilities around the strait disrupted contracted deliveries from its main supplier Qatar.<\/p>\n
State-owned\u00a0Pakistan\u00a0LNG purchased a cargo for July 21-22 delivery at around US$20.70 per million British thermal units via a tender that closed on July 15, according to traders with knowledge of the matter. That is the priciest LNG purchase for the South Asian country since 2022.<\/p>\n
Pakistan\u00a0was forced to buy the shipment because a planned delivery from Qatar was cancelled due to the disruptions in Hormuz, a key conduit for about a fifth of global LNG supply. This is the fourth cargo\u00a0Pakistan\u00a0purchased from the spot market for July delivery, as Islamabad scrambles to stave off a gas crunch and energy shortage.<\/p>\n