By Chrysostomos Tsoufis

While the whole world has its eyes on Israel and its region Gaza Stripfinancial analysts on their computer screens have focused their attention on the Straits of Hormuz, the only sea route to the Persian Gulf.

Through the Straits of Hormuz, 17% of the world’s oil flows and 33% of that – necessary for Europe’s energy sustainability – liquefied natural gas, LNG. All analysts are therefore trying to calculate the consequences for the world economy in the scenario of US involvement initially in the conflict in the Middle East and the dual response from the OPEC with an oil embargo and Iran’s subsequent blockade of the Straits of Hormuz. Everyone comes to the same conclusion. This particular scenario opens the gates of hell for the global economy.

The most moderate estimate speaks of a jump in oil prices to $250/barrel. THE Professor of Economics at the University of Helsinki Tuomas Malinen he estimates a price of $300 according to his own forecasting model.

Europe in particular would be faced with an energy crisis that would paralyze it. Having found a balance by replacing Russian natural gas through LNG pipelines with tankers from the Middle East, now these quantities would be lost suddenly. Mallinen speaks of energy blackouts across Europe that would completely destroy industrial production and raise questions of viability across entire industrial sectors. Of course the price of significantly less energy that would reach the Old Epirus would be at unimaginable levels.

In a chain reaction, inflation, which has been on a downward trajectory for the past few months, would once again take off, eating into family budgets. The increases would be such that in some parts of the planet hyperinflation would appear, a term used when price increases exceed 50% on a monthly basis, although such increases have also been recorded over a period of only a few days. In such an environment central banks around the world would be forced to continue raising interest rates making servicing existing loans a nightmare and taking on new ones a midsummer night’s dream.

All of the above is of course a recipe not for a simple recession but for economic collapse. In fact, in a period when especially Europe it is gasping for breath avoiding recession under current conditions by a few tenths of a unit.

To this dystopia should be added according to all analyzes the double collapse of financial markets and the global banking system with incalculable losses of money.

According to Jamie Dimon, the most powerful banker on the planet, we may be living through the most dangerous time globally in decades.