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Immediate measures at the outbreak of the war

At the start of the war on 28 February, the immediate impact of the conflict was clear: the return of all travellers who were either on holiday in the Arabian Peninsula themselves or whose flights were routed through the Middle East. Around six million people were affected by these developments. Whilst airlines (often with government assistance) found solutions to this, the war is now entering its seventh week and the second week of a fragile ceasefire, with the US now reportedly controlling the Strait of Hormuz.

Medium-term consequences of the closure of the Strait of Hormuz

All medium-term implications are directly linked to the safe passage through this strait, through which 20% of crude oil and liquefied natural gas (LNG) is shipped.

More than 60 countries have introduced government measures to tackle the fuel crisis, which is manifesting itself differently in each country. Individual measures can be found in the International Energy Agency (IEA) matrix.

An overview of some of the measures travellers may encounter:

Europe:

In many EU countries, the price of petrol and diesel has risen. Whilst most countries are responding to the crisis by reducing VAT, in some cases – such as in Germany – this is supplemented by a rule allowing price increases at petrol stations only once a day.

In Slovenia, for example, this measure is supplemented by rationing fuel supplies to 50 litres per person per day.

In other countries, such as Lithuania, regional train ticket prices have been halved to encourage the use of public transport.

Asia:

Large parts of Asia are directly affected by the ban on oil and gas imports. In Mumbai, for example, one in five hotels has had to suspend operations either partially or entirely. Travellers may also find fewer street food stalls, as there are shortages in the distribution of gas cylinders for cooking and a black market is developing as a result.

Pakistan, which sources 80% of its oil and gas from the Middle East, is adopting a strategy of restricting business hours. Shopping centres and smaller shops across the country (except for Sindh province) are to close at 8 pm, whilst restaurants and bars are to close at 10 pm. From 10 pm, all private celebrations, including weddings, are also prohibited. Travellers should prepare for corresponding restrictions on nightlife.

In Thailand, holidaymakers with hire cars may face restrictions from 20 April, as the Thai government has tabled a proposal to close petrol stations nationwide daily between 10 pm and 5 am.

Travellers in Myanmar who decide to drive themselves may also be in for a surprise. The government has introduced an alternate-day driving scheme, under which cars with a specific number plate ending are permitted to drive on half the days.
South Korea has also introduced a similar scheme. Public car parks are accessible on alternate days to vehicles with a specific number plate ending.

In Sri Lanka, travellers may be affected by fuel rationing. Private vehicles can claim their allocation at petrol stations using a government-issued QR code. In addition, energy-saving measures are being implemented by switching off neon signs from 9 pm.

Africa:

In Egypt, too, travellers must come to terms with a restricted nightlife. Since 28 March, the government has ordered that shops, shopping centres and restaurants nationwide must close at 9 pm (exceptions apply on Thursdays and Fridays, when the closing time is 10 pm). Neon signs and, in some cases, street lights are also being switched off. Tourist facilities and hotels are explicitly exempt from these measures.

Further measures in Ethiopia, South Africa and Zambia relate to the reduction of VAT or the subsidization of diesel and petrol.

Americas and Australia:

In the Americas and Australia, few measures have been introduced so far that do not also affect holidaymakers and travellers.

A socio-political perspective

More than 60 countries have already begun to take measures to alleviate rising energy costs in some form. In many cases, this involves direct government spending through fuel subsidies or reduced government revenue through cuts in VAT on oil and natural gas. In a few cases, such as in Sri Lanka or the Philippines, direct grants are being provided to the poorest members of society.
These measures are likely more than just an economic necessity. The current energy crisis harbours the potential for social tensions, such as those already triggered by the energy crisis following the COVID-19 pandemic and in the wake of Russia’s war of aggression against Ukraine. It thus exacerbates existing socio-economic grievances and further intensifies them. Those affected economically include farmers, hauliers, the hospitality sector and energy-intensive industries, but rising energy costs will ultimately be passed on to consumers.
The protests in Ireland, which have been spreading across the country since 8 April and are currently forcing the government to take action, have already attracted initial media attention. Demonstrators have blocked access roads around petrol stations, demanding government measures to reduce diesel and petrol prices. Alongside farmers, hauliers and transport workers, sections of the public are also taking part, calling for government intervention to tackle rising living costs.

It remains to be seen whether the scale of the demonstrations in Ireland is an isolated phenomenon; this depends above all on the ability of governments to cushion the impact of the crisis. Nevertheless, the FAO warns of long-term consequences that add yet another dimension to the crisis.

Long-term considerations

The reduced availability of oil and gas resulting from the closure of the Strait of Hormuz has further long-term implications which, according to Caitlin Welsh (Director of the Global Food and Water Security Programme at CSIS), are felt in the food supply sector.

Whilst oil and gas affect fuel prices at petrol stations across Europe, South-East and East Asia are even more reliant on gas for everyday needs, such as cooking. Should supply shortages persist, farmers could sell their maize, sugarcane and soya crops to biogas plants at a higher profit, thereby causing fluctuations in the market for agricultural products.
Furthermore, the development of agriculture is determined by the price of fertilizers, which has been affected by the crisis in two ways. Firstly, in its processed form: 20–30% of the world’s fertilizers pass through the Strait of Hormuz. Secondly, due to the relative scarcity of the following products, which are necessary for the production of fertilizers and a certain percentage of which are traded via the Strait of Hormuz: Liquefied natural gas (20%), ammonium (23%), sulphates (45%), phosphates (20%) and urea (34%).
The agricultural sector is therefore doubly affected by the impact of the crisis, particularly as the fertilizer shortage is occurring in the spring, when demand is at its highest. Both a shift towards agricultural products that require less fertilizer and the decision to forgo fertilizer altogether due to lower crop yields would lead to price increases in the long term.

The key issue remains the opening of the Strait of Hormuz to shipping. Should the hostilities between the US, Israel and Iran continue to result in the complete closure of the strait following the fragile ceasefire (whether by Iran or the US), the repercussions of the conflict will escalate further. All developments in the conflict can also be tracked in A3M’s Global Monitoring on Iran.