The attack on the Saudi Arabian oil fields causes unrest and stirs fears. It is not only the fear of a further escalation in the Middle East that is driving people around, but also the question of consequences for Germany: are we being asked to pay by higher gasoline and consumer prices? And could a rise in oil prices drive the already fragile global economy into recession? The conflict between Iran and Saudi Arabia alone shows us once again that Germany remains dependent not only on the world economy but also on fossil fuels. This problem is not expected to change the climate package either. After all, despite good approaches, it does not go far enough to reduce this dependency and give Germany's energy policy more autonomy.
The attack on Saudi Arabia rightly causes great fears. After all, the country is the world's largest exporter of crude oil. 20 percent of all world-wide reserves are there. Even the "small" decline of five percent of global production caused by the attacks is already having a noticeable impact on oil prices and the global economy. A company may be able to cope with a delay in its investments in machinery or software for a few months. But it can not do without the constant supply of energy.
The oil price rose in the short term by 15 percent in response to the attacks. This is no reason to panic, as oil prices often fluctuate quite a lot and most companies have hedged contracts against such short-term outbreaks. German consumers should also not feel much of it. The petrol price consists largely of taxes and the heating oil prices are unlikely to turn out either.
Rather, the greater concern is that this attack is the beginning of a military and political escalation in the Middle East that would drive the world economy into recession. The world economy and, above all, the German economy are already weakening and they are also exposed to a number of risks that should not be underestimated: the trade conflicts initiated by Donald Trump have destroyed the trust of many companies over the last two years and led to a decline in world trade of almost ten percent. China is defending itself, even as it has now broken a currency conflict from the fence, which could lead to a significant appreciation of the euro and thus less exports from Europe. In addition, a tough Brexit threatens, which could hit not only the British, but also the German economy even harder than before. Italy remains an insecure canton and a renewed alarm of the euro crisis is not unlikely in a banking sector that is still weak. Add to that the increasing likelihood of a recession in the US.
Export orientation is becoming a boomerang
A perfect storm could sweep the global economy if a number of these risks become reality at the same time. An increase in energy prices could be the proverbial last drop that overcomes the chaos and forces the global economy into a downward spiral. Germany is much more affected than most other countries by its enormously high dependence on exports. This export orientation, which enables the German economy in good times to benefit disproportionately from the stronger growth in China and other emerging economies, is now developing into a boomerang and a risk in bad times.
Fratzscher's distribution questions - always on Fridays
Subscribe to the column by Marcel Fratzscher as an e-mail.
In the future, Germany can and must protect itself against such risks more than anything else. Above all, this should reduce dependence on oil and gas imports. Although Germany does not import even two percent of its oil from Saudi Arabia, it is all the more dependent on Russia, that is to say, on a country which is just as unsafe as Pakistan and accounts for around one third of oil imports.
A climate package of the Federal Government could have been a good opportunity to close this open flank. In spite of the current trend - many sensible approaches and the willingness to finally reach the climate goals by 2030 - this package will probably not sufficiently reduce dependence on fossil energy sources and imports from countries such as Russia for the foreseeable future.
But this would have been important and necessary in order to improve the economic stability of Germany and Europe and not to become the plaything of the global powers. It is a pity that politicians have not shown the courage to push the energy transition and the transition to renewable energies even more decisively - and thus to loose more of their dependence on fossil fuels.