World can’t be held to ransom for Iran’s uranium. Opening Hormuz should be Trump’s priority
Last year, world economy grew 3.4%, a modest increase despite Trump’s tariffs. In Jan, IMF predicted 2026 would also be a 3.4% year. Now, it has revised its estimate downward to 3.1%, but its chief economist sees 2.5% as a likelier number. What’s changed is the Hormuz crisis: the biggest energy shock in history. For the past 50-odd days, oil and gas have barely trickled out of the Gulf. Unable to move oil and gas via Hormuz Strait, Gulf nations have scaled back production. By one estimate, 500mn barrels of oil output, worth $50bn, and enough to last US a month, has been lost. No LNG has crossed Hormuz in this period. Plus, shortages of fertiliser, aluminium, helium and sulphur – in turn affecting production of copper and nickel – have emerged. If this continues, world growth may slow to 2%.
That’s why opening Hormuz at the earliest is essential. And the only way to do it, permanently, is through talks with Iran. US and Israel have already seen the consequences of unprovoked war. Their strikes may have berthed Iran’s navy on the seafloor, but it’s still got enough gunboats to cause harm, as we saw on Saturday, when two India-flagged vessels were attacked. Iran has missiles and drones too. What force might not achieve for another month, or six, talks can do now. In fact, last week started well after the first round of US-Iran talks, followed by Israel-Lebanon ceasefire, and Iran’s unexpected suspension of its own blockade, on Friday. Oil prices eased and stock markets soared. But now, after Iran’s gunboat action, we’re starting another week with trepidation.
The air is tense also because US-Iran ceasefire runs out on Wednesday. Both sides keep claiming good “progress” in talks, but the fate of Iran’s uranium stockpile remains a sticking point. As for Hormuz, when Iran relented on Friday, couldn’t US have played ball? Relentless humiliation of your opponent is hardly the way to swing a deal. It was an opportunity to normalise traffic through Hormuz – something US shouldn’t forget in its pursuit of Iran’s uranium. Until sea traffic returns to normal, Gulf states won’t start pumping oil and gas at their old rates, shortages of aluminium, sulphur, etc, won’t ease, and world economy will continue limping. Trump has already rescheduled his meeting with Xi once. If he expects a hero’s welcome in China mid-May, he better unlock Hormuz fast.
Disclaimer
Views expressed above are the author’s own.
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