Singapore Warns of Strait of Hormuz Blockade, Global Recession Risks Intensify
JAKARTA, KOMPAS.com — The potential for a prolonged blockade in the Strait of Hormuz is seen as capable of bringing serious consequences to the global economy.
In addition to triggering a surge in energy prices, the disruption to this strategic shipping route also risks causing chain effects on fertiliser, food, and even high-tech industrial sectors.
Singapore’s Prime Minister Lawrence Wong emphasised that his government is continuously monitoring developments in the conflict affecting the world’s energy trade routes.
According to him, attention is not only focused on the ongoing military operations but also on the possibility of continued shipping disruptions in the Strait of Hormuz.
“However, regardless of the military operations, the key question is whether the Strait of Hormuz will continue to be blockaded and for how long,” said Wong.
Wong warned that the economic impacts from a prolonged blockade in the Strait of Hormuz could be very extensive and potentially drive a global economic slowdown.
He assessed that public focus so far has been more on disruptions to oil and gas supplies. However, according to him, the real impacts could extend to various other sectors.
“A lot of attention is on oil and gas, but the impacts are broader than that because fertiliser supplies, for example, could be affected, and then it will impact food supplies,” said Wong.
Disruptions in fertiliser distribution could affect global agricultural productivity. In the medium term, this situation could drive up food prices in various countries.
“Or take another example like helium. I think 30 percent of the world’s helium passes through the Strait of Hormuz, and helium is used in MRI machines, special equipment in hospitals. Helium is also used in semiconductor production,” he stated.
According to him, helium is an important commodity in various sectors, from healthcare to the semiconductor industry.
“So, it’s used in many other fields. There will be many potential chain impacts,” said Wong.
“Therefore, a prolonged strait blockage will have significant implications for the global economy and could plunge the global economy into a downturn, decline, or even recession,” said Wong.
Amid global uncertainties, Wong said that the Singapore government has prepared various measures to cushion domestic economic impacts.
“So, these are the things we are concerned about. We don’t know if it will happen, but we are monitoring it very closely,” he said.