Welcome to the Eurointelligence podcast. I'm Wolfgang Monschow and with me, I'm Zuzana Munchank and Jack Smith.

Today we will talk about supply chains. Supply chains once again, this time under threat by the closure of the strait of Hormuz, oil, gas, bauxite, aluminium fertiliser, all under constraints right now. This is how a regional war

becomes a factor for the global economy. Now energy is clearly at the forefront of our minds.

We're running low on gas supplies in Germany, dramatically so in the UK.

I've heard people talking about food rationing as a potential consequence if you know under certain

adverse scenarios. So how is it that we have a war in the Middle East and in England we talk

about food rationing? Jack, can you explain those links

to us, please? I mean, the fundamental root of this is that we are still, I mean, of course

there's been energy transition progress, but we're still fundamentally a hydrocarbon-based

economy, right? And we are going to continue to be a hydrocarbon-based economy likely for decades to come.

I think that there are different views on the pace of a transition away from that. Some people

believe that it will be slower. Other people believe that it will be faster. And for what it's worth,

I think that the nature of this crisis itself is going to change the pace of this transition

in various different ways.

But for the time being, we are still a hydrocarbon-based economy.

Oil and gas, but especially oil, are the bedrock of almost any critical supply chain that you can think of,

not just as energy sources, but as chemical feedstocks.

And this is having a huge impact because the area

around the Persian Gulf is one of the lowest cost, if not the lowest cost, places to actually

extract oil and gas. We talk a lot about shale oil, for instance, and the impact that this

has had on Middle Eastern dominance over oil and gas,

but the cost of extracting a barrel of oil around the Persian Gulf is quite markedly

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