The long term consequences of the closure of the Strait of Hormuz are causing concern. Cyprus tourism is also on edge. Cyprus is coordinating with its partners, says the President.
The new conflict in the Middle East, which broke out early Saturday morning with the simultaneous attack by the United States and Israel on Iranian targets and Iran’s retaliatory ballistic missile strikes affecting countries across the wider region including Israel, the United Arab Emirates, Bahrain, Kuwait, and Saudi Arabia, has placed not only Cyprus’ political and diplomatic personnel on alert but also key sectors of the economy.
This new confrontation, coming just eight months after the initial attack against Iran’s nuclear programme, immediately signalled a sharper escalation, as several countries beyond the three directly involved were affected. The consequences for the Middle East and the global economy are raising concern internationally and in Cyprus, particularly given that the airspace of several countries has been closed and Iran has already shut the Strait of Hormuz.
On Saturday evening, the President of the Republic held telephone conversations with the President of the European Commission and the Greek Prime Minister regarding developments in the region, stressing that Cyprus is coordinating with its partners to safeguard stability and security in the wider area. Mr Christodoulides also stated that he had been informed by the British Prime Minister that the British Bases in Cyprus were not used and will not be used in military operations in the region.
Tourism on alert
From the early hours, the Ministry of Foreign Affairs activated the ESTIA Plan for the reception and repatriation of third country nationals from crisis regions via Cyprus, although no such request has been made so far.
Yesterday, Israel, Iran, Iraq, Bahrain, Qatar, Kuwait, and Jordan closed their airspace, while during Saturday alone a total of 25 flights, both departures and arrivals, to and from Larnaca and Paphos airports were cancelled to and from the above countries. Wizzair and Aegean Airlines also announced the suspension of flights to the Middle East until 7 March and 3 March respectively.
Although Cyprus is still in the winter season, the new conflict is causing reasonable concern among tourism stakeholders regarding bookings and travel, as the intensity of this conflict appears greater and its duration remains unknown and may be prolonged.
Oil concerns grow
At the same time, the expanded conflict in the Middle East is raising serious concerns in the global oil market. In anticipation of the attacks, prices had already risen on Friday, reaching 67 dollars per barrel, with analysts at Barclays not ruling out Brent reaching 80 dollars in the near future.
Just hours after the attacks began, Iran closed the Strait of Hormuz, a crucial passage for global oil trade through which one third of the world’s seaborne oil exports pass. The global oil market may be able to manage this development for a limited time, but not if the closure lasts for months. As international analysts note, a prolonged shutdown would push oil prices above 100 dollars per barrel, reduce demand, and potentially accelerate an economic downturn, with consequences for the American economy as well.
Source: SigmaLive- Economy Today
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