The global supply of oil and natural gas has been reduced by about a fifth as a result of the blockade in the Strait of Hormuz, and fuel prices have skyrocketed. That has also reduced the supply of petrochemicals needed to make everyday items such as clothing, shoes and plastic bags, CNN writes in an analysis.
The crude oil shortage threatens to lead to a shortage of almost everything, is the verdict of the publication, which explained that the pressure is spreading in every area of the consumer market, and the prices of materials such as plastic, rubber and polyester are rising.
The impact is so far most evident in Asia, which provides more than half of the world's production and is heavily dependent on imports of oil and other commodities.
The government in South Korea, where people have panic bought trash bags, has urged event organizers to use as few single-use items as possible.
In Taiwan, a hotline has been set up for producers who have run out of plastic, and rice farmers have told local media that they may raise prices because they cannot get empty bags.
There are also problems in Japan, where the oil crisis has raised fears that patients with chronic kidney failure will not be able to receive treatment because of a shortage of plastic medical tubing used in hemodialysis.
In Malaysia, glove makers claim that the lack of a by-product needed to make rubber latex threatens the global supply of medical gloves.
A crisis that “breaks down on everything very, very quickly”
Manufacturers pay more for energy and raw materials, which affects profit margins and leads to higher prices for consumers. Rising fuel costs are disrupting transportation and logistics, and limited supplies of other materials from the Middle East, such as fertilizers and helium, could make food and electronics more expensive.
The crisis, said a representative of a consulting firm that helps international businesses expand in Asia, “is hitting everything very, very quickly: beer, noodles, chips, cosmetic toys.”
That's because lids, crates, snack bags and plastic containers are becoming increasingly difficult to source, added Dan Martin, co-director of business intelligence at Dezan Shira & Associates.
Petroleum derivatives are also needed to produce adhesives for shoes and furniture, industrial lubricants for machinery and solvents for paints and cleaning processes, he explained.
“It's very quick transmission from oil and transportation disruptions to petrochemicals and consumer goods,” he warned.
The International Monetary Fund had warned on Monday that the challenges come “at a time when many economies have limited room to absorb shocks”.
“Although war could shape the global economy in different ways, all roads lead to higher prices and slower economic growth,” the IMF said.
PHOTO: Juan Moyano | Dreamstime.com
