Diesel crisis! Hormuz supply disruption hits industrial lifeline, global economy on alert

1. Traders and analysts say that the surge in diesel prices is threatening a slowdown in global economic activity. Disruptions in shipping through the Strait of Hormuz could result in a daily loss of 3 million to 4 million barrels of diesel supply, accounting for about 5% to 12% of total global consumption. Export obstacles from Middle Eastern refineries could cause an additional daily loss of 500,000 barrels of diesel.2. Diesel is the oil product most severely affected by this conflict, as it supports freight, agriculture, mining, and industrial activities, making it the fuel most sensitive to macroeconomic conditions. If the Strait of Hormuz is blocked for an extended period, retail diesel prices could double. From February 27 to March 10, U.S. diesel futures rose by more than $28 per barrel, far exceeding crude oil's $16 per barrel increase.3. Sharp fluctuations in diesel prices will trigger a chain reaction in the global economy. Transportation costs for almost all goods are rising, which will inevitably be reflected in food and consumer product prices. If prices remain high, the greatest risk lies in triggering a second wave of cost-driven inflation.4. The surge in diesel prices may have a direct impact on food prices, forcing American farmers to slow down progress just as the planting season begins. Persistent fuel shocks could essentially lead to stagflation, as they drive up transportation and production costs for goods while squeezing consumer spending.