The Economic Consequences of Iran Closing the Strait of Hormuz

Seminararbeit , 2020 , 24 Seiten , Note: 4.5

VWL - Makroökonomie, allgemein

With my paper, I will illustrate the economic importance of the Strait of Hormuz for the world while giving a short update on the current political situation. Nevertheless, I will keep the focus on possible consequences of Iran closing the Strait, be it on an international or Iranian level.

This analysis will be carried out based on recent research. Additionally, similar situations which occurred in the past, namely the conflict between the US and Iran in 1988, which culminated in “Operation Praying Mantis”, can be used to predict the consequences of the closure of the Strait of Hormuz nowadays. Further on, I will construct two scenarios: one of further escalation and another one of de-escalation. Three indicators, that is the development of the price of Brent crude oil, numbers depicting Iranian GDP growth, and the Consumer Price Index will allow me to deliver a prognosis, on what effects each one of these scenarios might have for Iran as well as the global economy. The hypothesis, which is going to be reviewed in the conclusion of this paper, is the following: “A closure of the Strait of Hormuz would have serious consequences for the global economy.”

Content

1. Abstract

2. Introduction

3. The Strait of Hormuz and its Economic Importance
3.1. Global Importance
3.2. Importance for Iran

4. Recent Political Developments
4.1. Situation 2020
4.2. Economic Indicators and their Claims
4.2.1. Oil Price
4.2.2. GDP Growth
4.2.3. Consumer Price Index

5. Possible Outcomes
5.1. De-escalation and its Consequences
5.1.1. For Iran
5.1.2. For the Globe
5.2. Escalation and its Consequences
5.2.1. For Iran
5.2.2. For the Globe

6. Conclusion

7. Literature

8. Appendix

• Hochschule: Universität Luzern
• Note: 4.5
• Autor: Nathanael Schabrun (Autor:in)
• Erscheinungsjahr: 2020
• Seiten: 24
• Katalognummer: V1139766
• ISBN (eBook): 9783346515117
• ISBN (Buch): 9783346515124
• Sprache: Englisch
• Schlagworte: Strait of Hormuz, Strasse von Hormuz, Middle East, Naher Osten, Macroeconomics, Makroökonomie, Iran, USA, Oil, Öl, Sanctions, Sanktionen, War, Krieg, Nuclear Deal, JCPOA, Geopolitics, Geopolitik, Revolutionary Guard, Revolutionsgarde, International Trade, World Trade, Welthandel, Nuclear Energy, Kernkraft, Saudi Arabia, Saudi Arabien, Oil price, Ölpreis, GDP, BIP, Inflation, Trump