Experts: Closing the Strait of Hormuz Could Lead to the Collapse of the Dollar System
In an interview with Sputnik News, energy economist Dr. Kazi Sohag said that closing the Strait of Hormuz in response to U.S. and Israeli attacks on Iran could have catastrophic consequences for the world economy and deal a devastating blow to the dollar's status.
According to the expert, the narrow Strait of Hormuz, which connects the Persian Gulf and the Arabian Sea, transports about 17 to 20 million barrels of oil per day. This accounts for more than 20% of global daily consumption. Sohag explained that these supplies mainly come from Saudi Arabia, Iraq, the UAE, Kuwait, Iran, and Qatar. The main buyers are China, India, Japan, South Korea, and European Union countries.
However, analysts warn that the impact is not limited to the region. He pointed out that the Bab el Mandeb Strait and the Suez Canal also face additional risks, as the situation in these areas has already been tense due to Houthi activities in the Red Sea. The economist noted that 8.8 to 9.2 million barrels of oil and 4.1 billion cubic feet of liquefied natural gas are transported through these routes daily. Sohag emphasized that the simultaneous blockade of these key nodes would cause an exponential increase in global market supply shocks.
When discussing the possible impact on the currency system, Dr. Sohag pointed out the complex prospects facing the United States itself. On one hand, oil-exporting countries such as Russia, Nigeria, Angola, Malaysia, and even the United States may benefit from rising prices in the short term. On the other hand, the expert emphasized that Washington's gains will be uncertain.
Dr. Kazi Sohag concluded, "While energy producers may profit, the collapse of global trade and the reduction of dollar settlements may weaken the international status of the dollar."
Original article: toutiao.com/article/1858474105282569/
Statement: This article represents the views of the author alone.