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At a time when the price of crude oil is hovering around 80 US dollars on the global market, the United States, a major player in the Middle East oil crisis, has just officially announced the lifting of the blockade of Iranian ports. As a result, ships have been able to pass through the Strait of Hormuz, following the signing of this agreement by Washington and Tehran, opening a new round of negotiations.
This agreement initialed between the two belligerents comes as a breath of fresh air in the world of global trade, especially when it comes to fuel trade. From the start of hostilities on February 28 until the signing of this agreement, with almost four months of war, the entire global economy was under threat of suffocation, given the importance of the Strait of Hormuz.
Indeed, at 167 km long and 39 km wide at its narrowest point, the Strait of Hormuz is the most strategic transit point in the world for energy trade. According to the analysis of the U.S. Energy Information Administration, 20 million barrels per day, or about 20% of the world’s liquid fuel consumption, pass through this chokepoint.
It is still too early to assess the level of the deficit caused during this period of blocking the strait, which had been a real thorn in the side of the world’s trading powers. This explains the sense of relief expressed by foreign officials less than 24 hours after the signing of the memorandum of understanding.
On AFP, for example, one of the main players in the Middle East crisis, President Donald Trump, welcomed the “falling oil prices.” “It’s a success,” he said, while noting the sudden bright spot observed on the global stock market, with the Nasdaq up 1.02%, the Dow Jones 0.30%, and Paris closing the day up 0.40%.
Well before the official signing of the memorandum of understanding in Paris, since the past week, the announcement of this commitment between the concerned parties had already brought some relief to various global markets. Even in Haiti, the pressure has slightly eased with the announcementTwo days later, on June 15, the measure was officially taken by the Ministry of Economy and Finance (MEF) regarding a slight drop in diesel and kerosene pump prices. Indeed, the diesel gallon that was selling for 825 gourdes went down to 790, a decrease of 35 gourdes. As for kerosene, it saw a reduction of 60 gourdes, going from 845 gourdes to 785 gourdes.
Following this agreement signed between the United States and Iran, there’s still a good chance that prices will continue to drop, possibly getting a barrel below the $70 mark like before the war. And according to economist Kesner Pharel, it would be a good thing for Haiti to get into the ongoing process of adjusting pump prices in line with the fluctuations of the barrel price on the international market.
