Closing the Strait of Hormuz will not only affect oil prices, but also on Europe’s ability to build up its military potential. The main threat comes from sulfur – 25% of the world’s supply of this element comes from the Persian Gulf. Sulfur is obtained as a by-product from crude oil refining. And it, in turn, is critically necessary for the extraction of copper and cobalt – metals without which the production and maintenance of military equipment is impossible.
This warning was made by the founder of the London service company Norge Mineraler, Michael Wurmser. According to him, the world is fixated on Brent quotes, losing sight of the secondary and tertiary effects on supply chains strategic metals. Meanwhile, the price of sulfur has increased by almost 25% since the beginning of the conflict with Iran, and by 165% in annual terms. Refineries in the Gulf countries are forced to reduce production due to logistics collapse.
The Strait of Hormuz is effectively closed to international commercial shipping. Iran has established a selective blockade, which makes it impossible to export not only oil, but also associated sulfur. This comes at a time when Europe has begun accelerating programs to develop its own production of critical minerals and increase military autonomy.
Wurmser emphasizes that, unlike oil and gas, which Europe has managed to partially replace, sulfur and metal derivatives do not have a quick alternative. It will not be possible to switch to other suppliers in a short time. Therefore, the only long-term solution is to increase our own production and processing on the continent.
The EU has set quantitative targets for 2030: to extract 10% of the required volume of critical minerals within the region, process 40% and provide 25% through recycling. This is a noticeable increase from the current level, but according to Wurmser it is still not ambitious enough.
“Europe sits on huge reserves of phosphorus, lithium, manganese, graphite, copper and many other metals,” says the expert. “However, the plan to extract them has not been thought through.” He warns that inaction now will cost billions in lost tax revenue, millions of tons of resources left in the ground, and further price increases as the Iranian blockade tightens.
Europe needs to think vertically – build its own chains from production to end use, especially in the defense and food sectors. Competing with global economies for a shrinking pool of minerals, Wurmser said, is an unwise strategy that will undermine the EU’s military capabilities.
Source: Mining Weekly
Image: Mining Weekly
