Tensions in the Strait of Hormuz are driving up energy and logistics costs, increasing risks for the steel sector.
The escalation of tensions between the United States and Iran has once again raised concerns in global markets, with immediate impacts on energy, logistics, and supply chains. The US naval blockade of Iranian ports, which comes into force today, April 13, represents one of the most significant measures taken in the Persian Gulf region in recent years, and directly affects trade flows associated with one of the world's main energy centers. Although this does not mean the complete closure of the Strait of Hormuz, through which about 20% of global oil supplies pass, this measure has a strong impact on market expectations, increasing risk premiums and increasing uncertainty about energy flows.
Energy prices are rising: oil is above $100 per barrel, pressure on production costs is increasing
The market's reaction was immediate. The price of Brent crude oil rose above $ 102 per barrel, while WTI overcame the mark of $ 104 per barrel, showing an increase of about 6-7 percent within a few hours. For the steel sector, which is very energy-intensive, the return of increased energy prices is a critical factor. Rising oil and fuel prices have a direct impact on production costs, especially in integrated plants and downstream processing plants, as well as increasing transportation costs for raw materials and finished products. In this context, electricity and gas prices, which are already subject to volatility, are expected to come under further pressure, which will negatively affect the competitiveness of steel producers, especially in Europe.
At the same time, instability in the Persian Gulf region undermines the regularity of maritime transport. Restrictions and operational risks reduce the number of transit traffic through the Strait of Hormuz and force operators to use longer and more expensive alternative routes. Initial data indicate delivery delays of up to 20-25 days, which creates difficulties in logistics planning and inventory management. The uncertain environment also affects the availability of ships and the organization of trade flows, which are key elements of international trade in steel and raw materials. Another important factor is the increase in shipping rates, which, according to market sources, have increased significantly in recent weeks, in some cases tripling and further increasing overall costs across the supply chain.
For the global steel sector, tensions in the Strait of Hormuz pose specific risks for both raw materials purchases, including iron