“…The CEO of Dow is warning that a global supply crisis is hitting a very wide range of industries, and he is projecting that it could take 250 to 275 days to unwind this mess once the Strait of Hormuz is opened again…
Petrochemical price spikes and shortages from the Iran war likely will cause inflationary effects at least through the end of the year on construction materials, consumer goods, the automative and aerospace industries, and much more, the CEO of chemical manufacturing giant Dow said.
While much of the global supply-shock focus is on oil, natural gas, fertilizers, and even helium for semiconductors, almost 20% of global petrochemical capacity is blocked from the effective closure of the Strait of Hormuz chokepoint by Iran, said Dow chair and CEO Jim Fitterling.
“The die is being cast for the rest of the year for what’s going to happen in the markets,” Fitterling said at the CERAWeek by S&P Global conference in Houston. “It’s like the unwind we saw on supply chains during COVID.
“You could be in the 250- to 275-day [range]. This is not going to be an instantaneous rewind.”Of course, all of the economic infrastructure that has been destroyed on both sides will not be rebuilt in 250 to 275 days.
Sadly, the truth is that it will take years to fully rebuild all of that infrastructure, even if the war ended immediately.
So ultimately I agree with those who are warning that the economic impact of this war “will stretch until the end of the decade”…”