What began as a fast military operation is now turning into a protracted modern war. The Strait of Hormuz remains blocked, meaning 34% of the world’s supply of oil has been brought to a halt.
Concerns are now rising that Iran could deploy sea mines in the Strait. Trump declared that Iran may be considering this action in a social media post on Tuesday 10 March.
Aviation likely to take the most immediate hit
Iran itself has stated that it is prepared to fight this war for months. If this happens, the effect on the events industry will go beyond the direct (and significant) effect to the surrounding region in the Middle East. Arguably the biggest impact will be on aviation. With international flights avoiding dangerous airspace, airlines are having to reroute.
“The central corridor across Iran, Iraq and the Gulf is effectively closed, so most traffic is going either north via the Caucasus and Afghanistan, or south via Egypt/Saudi/Oman,” said David Mumford, an international operations specialist at Opsgroup. “Both routes are longer and busier than usual, so flight times and fuel burn are higher,” Mumford told the BBC.
Direct flights from Seoul to London seven times more expensive
UK newspaper The Independent reported that the cost of some flights had risen seven times due to the crisis. According to Google Flights data, direct flights from Seoul to London on 11 March with Korean Air Lines shot up to $4,000 from $564 the week prior.
Venue and catering costs are likely to rise
What’s more, with a global shortage of oil, energy and food will become more expensive. Almost every cost an organiser faces is related to energy. From venue lighting, logistics and transport to refrigeration, almost all bills are tied in some way to the cost of energy. Countries with higher energy security like China and the US may be more resistant to theses price shocks. Meanwhile, countries that rely on importing fossil fuels, including India, South Korea, and many European nations are more vulnerable.
Catering costs will go up for an additional reason. The Strait of Hormuz is not only a chokepoint for oil; one third of the world’s supply of fertiliser also flows through the maritime route. With a shortage of fertiliser, the cost of food is likely to increase, meaning that catering costs will also rise.
What do you think the impact will be? Share your thoughts with us by emailing treilly@mashmedia.net.
Source: www.exhibitionworld.co.uk
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