Two weeks have passed since the start of the war against Iran. A conflict that has upended international flight patterns, global diplomacy, and the global oil supply. The disconcerting thing is that neither the United States nor Israel has communicated what would need to happen for the war to be considered won. This uncertainty is centered on the Strait of Hormuz, through which a fifth of the world's oil passes. Images of burning oil tankers summarize Iran's pressure strategy. If this passage is closed, the impact on the global economy is guaranteed, and Trump's promise to escort the ships—with a system that won't be ready until the end of March—only seems to confirm that the end is not as near as we would like. But it's not just oil: we must also consider its derivatives and other raw materials that pass through the strait. One of these is sulfur, essential for producing sulfuric acid, the most manufactured chemical in the world and indispensable for extracting copper and cobalt, which in turn are fundamental for electrical transformers, batteries, and data center infrastructure. Or nitrogen fertilizers, basic for global food production.
Given this landscape of uncertainty, it is advisable to closely monitor the economic consequences and prepare measures to mitigate their impacts. The Spanish government has announced that it will do so, but there are still no concrete initiatives on the table.
How are we positioned at home? Initially, there are two factors in our favor. The first is that our direct dependence on products passing through that strait is small; only a partial consolation, because when the global supply decreases, the price rises, regardless of each country's direct dependence. The second is the experience in managing the economic consequences of the Russian invasion of Ukraine, which also generated an increase in energy prices and, consequently, an inflationary environment. It's worth evaluating the effectiveness of the measures taken then. We should replicate what worked and avoid repeating mistakes, such as direct subsidies to gas stations.
From past crises, we can also recover the concept of greedflationGreedy inflation. A term that has resurfaced recently, as we've witnessed the rapid increase in fuel prices. Distributors have begun to factor in the "replacement cost," that is, the cost of refueling. This mechanism operates quickly when prices rise and slowly when they fall. The National Commission for Markets and Competition has announced it will monitor gas station prices to ensure they are not abusive. In fact, a data analysis Looking at the last 75 years, a shift in trend has emerged since the pandemic: corporate profits are now driving price increases. In other words, it has been demonstrated that some companies are taking advantage of circumstances, such as a war, to disproportionately increase their profit margins.
Given this, government measures should be more decisive and implemented more quickly than announced.
