As the world is plunged into another energy crisis, market allocation is leading to grossly unjust outcomes, as the rich outbid the poor. A multilateral oil buyers’ club is urgently needed to defend a price ceiling in global oil markets and allocate resources in a way that meets people’s essential needs and minimizes the economic fallout.
AMHERST—The US blockade of maritime traffic entering and leaving Iranian ports in the Strait of Hormuz—a critical waterway through which Iran was previously preventing the passage of most ships—is intensifying the global energy crisis. If Iran’s seaborne exports are interdicted on top of the energy exports of the Gulf countries, nearly 25% of total traded crude oil will be missing from global markets. Net oil-importing countries will be hit the hardest. Already, countries in Asia and Africa are facing energy shortages, which will only worsen.
Source:
www.project-syndicate.org
