Wifo Chief Felbermayr: 'My Greatest Concern is the Food Supply'

Gabriel Felbermayr, head of the Wifo economic institute, identifies the global food supply as his primary concern, expressing worry about its stability amidst escalating international tensions. He acknowledges that while the immediate impact on oil prices might be less severe than initial shocks, the underlying global economic dependencies remain a critical vulnerability.

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My greatest concern is the food supply.

Felbermayr suggests that the world economy is deeply intertwined, a situation that has developed over decades due to financial incentives. He points out that these dependencies have not diminished since the COVID-19 pandemic but have instead shifted. For instance, Europe's reliance has moved from Russian pipeline gas to U.S. liquefied natural gas, highlighting a complex web of new interconnections.

The expert criticizes Europe's past naivete in observing these growing dependencies. He notes that overcoming these challenges is proving more difficult than anticipated, with new dependencies emerging, such as the rapid integration of AI models into daily work. The refinement of rare earth elements in Europe, for example, faces hurdles due to protected patents held by non-European companies.

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The actors USA and Iran had an unspoken interest in letting oil pass and preventing a price of 200 US dollars per barrel.

Reflecting on the recent Iran-related peace talks and the continued restrictions in the Strait of Hormuz, Felbermayr anticipates that while the price shock might not reach the extreme levels of the first wave, the inflationary pressure is returning. He suggests that unofficial channels, like "shadow fleets," may have facilitated oil passage previously, and a similar dynamic could help stabilize prices again. However, the depletion of global oil reserves and the inability to replenish them fully present a significant risk.

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Yes, one can say that. It is, in retrospect, also a cheap and trivial observation.