UK, Europe Face GDP Contraction if Hormuz Strait Disruptions Persist Beyond October

NEW YORK, July 24. /TASS/. The UK and European nations face a contraction in GDP for the year if the Strait of Hormuz does not resume full operations by October, Bloomberg reported, citing estimates from the consulting firm Baringa Partners.

According to analysts, if shipping in the Strait of Hormuz remains restricted for another two months due to the new round of conflict between the US and Iran, it will trigger a surge in oil and gas prices sufficient to push the GDP of the UK and Europe into negative territory for the year.

According to the agency, Qatar that was the world’s second-largest LNG exporter prior to the US-Israeli conflict with Iran, plans to soon notify European customers that the force majeure situation regarding gas exports will persist until mid-October. Consequently, Europe will have no chance of replenishing fuel deficits in underground gas storage facilities through imports from Qatar, the agency wrote.

The United States and Israel launched a war against Iran on February 28. In June, Washington and Tehran signed a memorandum of understanding providing for an immediate cessation of hostilities on all fronts, including in Lebanon. However, on the night of July 8, the United States resumed large-scale strikes on Iran, accusing it of violating the terms of the agreements regarding the Strait of Hormuz.