The disruption to global energy flows triggered by rising tensions in the Middle East is likely to be severe but temporary, according to the BlackRock Investment Institute (BII).
Jean Boivin, head of the BII, told Bloomberg Television on Thursday that tanker traffic through the Strait of Hormuz— one of the world’s most critical energy chokepoints — has dropped sharply, falling to around 16% of normal levels amid escalating regional tensions.
“This is a massive shock for now,” Boivin said in an assessment of the geopolitical situation, adding that the institute expects the disruption to last “weeks rather than months.”
“We think this is not days, for sure, but it’s not months either,” he said, adding that he expects the energy-led supply chain shock of the Iran war to last “in the realm of weeks.”
Oil prices have shown extreme volatility in recent days as markets react to rapidly changing developments in the region. International benchmark Brent crude surged above $119 per barrel earlier in the week on fears of supply disruptions linked to the Iran conflict, before falling to around $95 following signals that tensions may ease.
The rapid moves underscore the market’s sensitivity to developments around the Strait of Hormuz, which handles roughly one-fifth of global oil consumption and remains the world’s most important maritime corridor for crude shipments.
Despite the scale of the current shock, BlackRock said the global energy market is now better equipped to absorb supply disruptions than in past decades.
According to the institute, higher oil prices are likely to trigger self-correcting market dynamics, reducing demand while encouraging additional supply and logistical adjustments.
At the same time, strategic petroleum reserves and improved global coordination on inventories are expected to provide a buffer against immediate physical shortages.
BlackRock said the developments highlight what it describes as a “new regime” of elevated geopolitical risk, in which supply-side shocks increasingly shape global economic conditions.
While the current physical disruption to energy flows is significant, Boivin said structural shifts in the global energy system — including supply diversification — are expected to help prevent a prolonged economic shock.
By Mucahithan Avcioglu
Anadolu Agency
energy@aa.com.tr