Lead
The global energy crisis triggered by the Middle East conflict is entering a new phase as the summer season approaches, with Brent crude futures climbing above $111 per barrel for the first time since May 5. The escalation, linked to US and Israeli strikes on Iranian territory and tensions around the Strait of Hormuz, has prompted emergency measures in around 80 countries, according to the Financial Times as reported by TASS.
Coverage Comparison
TASS, the Russian state news agency, has compiled the latest developments from the Financial Times and comments from experts. The coverage focuses on the price surge, the potential for further increases, and the impact on various sectors, including the chemical industry and the Russian economy.
Key Claims
New Phase of Crisis
The Financial Times, as reported by TASS, says the crisis is entering a new phase as summer approaches, with growing demand for air conditioning and international travel potentially worsening the situation for oil, diesel, and jet fuel supplies. Economists have warned of possible new spikes in oil prices due to the fastest depletion of global reserves on record.
Paul Diggle, chief economist at the investment firm Aberdeen, told the Financial Times that Brent crude could rise to $180 per barrel. European Commissioner for Transport and Tourism Apostolos Tzitzikostas was quoted by the newspaper as saying that if the Middle East conflict is not resolved in the coming weeks, a global recession could become inevitable.
Russian Economy and Inflation
Kirill Tremasov, adviser to the Central Bank governor, said that changes in oil prices have a limited impact on the ruble's exchange rate and the Russian economy, but the situation in the Middle East could pose inflationary risks for Russia. He noted that global inflation could have a significant impact, and if the conflict drags on, it could lead to a global surge in inflation.
Tremasov explained that large oil reserves are currently keeping prices at relatively acceptable levels, even with the Strait of Hormuz closed. However, as reserves are depleted, a sharp rise in prices for energy resources could follow, leading to higher prices for everything else. Fertilizer prices have already risen sharply in the first wave of this crisis, he added.
European Chemical Industry
The European chemical industry is facing a crisis amid the Middle East conflict, which has exacerbated the rise in energy prices, the Financial Times reported. High energy prices and weak demand have already led to the closure of two plants in the chemical cluster of the Port of Rotterdam, one of the largest in the world.
Peter Huntsman, chief executive of Huntsman Corporation, which operates sites across Europe, including Rotterdam, told the newspaper that developments in the Middle East are "pushing energy costs even higher, reinforcing how exposed the UK and Europe remain to external shocks." The crisis has also caused a new rise in prices for energy and petrochemical feedstocks, including naphtha.
In early May, Kirill Dmitriev, Russian presidential envoy for investment and economic cooperation with foreign countries and CEO of the Russian Direct Investment Fund, said the world was heading toward the worst energy crisis in history because of record-high oil prices.