These Are The Adverse Repercussions Of The Strait Of Hormuz Closure On Trade And Container Prices
Amidst the tensions in the Middle East and the accompanying disruptions in the Strait of Hormuz, Algeria stands out among the countries affected by these transformations, experiencing both an improvement in oil revenues and temporary challenges that may impact maritime transport and international trade.
In this context, Mr. Ali Bey Nasri, Vice President of the National Association of Exporters, affirmed that the recent developments in the Middle East, particularly the closure of the Strait of Hormuz and the disruption of maritime navigation, have imposed new realities on the global economy in general, and on Algeria in particular, given its position as an energy-producing country on one hand, and a major importer of a significant portion of its needs from Asian markets on the other.
Mr. Nasri explained that the first repercussions were the rapid rise in oil prices, with the price per barrel jumping in record time to over 80 dollars. This level boosts Algeria’s energy revenues and supports the state’s financial balances, especially since hydrocarbons constitute the backbone of national exports. He considered that these price levels provide an additional margin for the government to continue financing major development programs, maintain the social character of the state, and strengthen foreign exchange reserves, emphasizing that Algeria, based on its previous experience, has become more capable of dealing with fluctuations in energy markets.
However, the foreign trade expert stressed that reading the scene must be comprehensive and balanced, because the same disturbances that raised oil prices also complicated global maritime transport. The closure of the Strait of Hormuz, or at least the decline in the fluidity of passage through it, forced many shipping companies to change maritime routes to longer and more costly paths, which directly affected transport prices.
Mr. Nasri further pointed out that the cost of renting a single container increased from about 5,000 dollars to nearly 20,000 dollars on some routes coming from Asia, due to increased sailing distances, higher insurance premiums, and geopolitical risks. Since a large part of Algeria’s imports of raw materials, industrial equipment, and consumer goods originate from Asian markets, this increase automatically reflects on the import bill and the final cost of the operation.
The spokesperson also noted that what is happening in the region will globally lead to delays in the arrival of some shipments, compared to the pre-disturbance phase, due to the rescheduling of voyages and changes in routes.
This may create temporary pressure on some supply chains in the world, but he reassured that this issue does not concern Algeria alone, but rather includes various countries commercially linked to Asia, meaning that the impact is global in nature and not a result of an internal imbalance.
Mr. Nasri affirmed that current data indicate that these disturbances remain linked to a specific geopolitical context, and are not expected to extend with the same duration or intensity that characterized the Russian-Ukrainian war, which reshaped energy and transport markets for a long period.
Mr. Nasri also considered that public authorities are closely monitoring developments, within a proactive approach aimed at ensuring the supply of the national market and avoiding any major imbalances.
The Vice President of the National Association of Exporters concluded his statement by emphasizing that the current phase once again highlights the importance of continuing the path of diversifying the national economy, strengthening local production, and developing national logistical capabilities.
He also stressed that Algeria, thanks to its location, resources, and experience in crisis management, is capable of transforming temporary challenges into opportunities to enhance the resilience of its economy and consolidate its financial stability.
