With on-and-off negotiations continuing between the US and Iran over freight passage through the Strait of Hormuz, the impact of petroleum and petrochemical supply restrictions is continuing to filter down supply chains.
Shortages of bitumen and tar used to bind asphalt threatens to disrupt major road-building and infrastructure construction programmes in India and South Korea, as well as general road maintenance from Europe to Australia. India has a government target to build 100km of highway per day, and normally imports around 40% of its bitumen from the Gulf.
Across India and much of south Asia, an ongoing shortage of cooking gas is affecting households, street vendors and restaurants that rely extensively on cylinders of liquefied petroleum gas (LPG). India imports over 60% of its LPG, and around 90% of that would normally come from the Gulf.
India’s environment ministry has told state pollution boards to allow restaurants and hotels to temporarily switch to biomass (wood, dried crops, animal manure), fuel pellets, kerosene and coal for a month, prioritising cooking gas for households and essential sectors. India’s households and hospitality industry have been strongly encouraged by government programmes in recent years to switch away from these fuels, since burning them releases higher levels of carbon monoxide, nitrogen oxides and fine particles, with significant health impacts – especially in confined living spaces. In some urban areas, it may be possible to switch to electric cooking, although much of the extra electricity required would be generated from coal-fired power stations, further contributing to air pollution and carbon emissions.
Shortages of jet fuel have led to surging prices, with major airlines worldwide cutting flights. While US producers have increased jet fuel production in response to global demand, they cannot replace all of the supplies that would normally have originated from Gulf petroleum. Uncertainty over future supplies looks set to continue as the summer travel peak approaches in the northern hemisphere.
Meanwhile, continued restrictions on fuels, fertilisers and polymers used in packaging are pushing up prices for food and consumer goods more broadly, and causing local shortages of various products – from Diet Coke in India to potato snacks, bottled water, cosmetics and rubber gloves in Asia, and the possibility of worsening existing shortages of medicines in the UK.
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