{"id":446620,"date":"2026-05-08T09:15:03","date_gmt":"2026-05-08T07:15:03","guid":{"rendered":"https:\/\/www.wifo.ac.at\/?post_type=publication&#038;p=446620"},"modified":"2026-05-08T21:31:33","modified_gmt":"2026-05-08T19:31:33","slug":"how-a-strait-of-hormuz-closure-would-affect-austria","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/446620\/","title":{"rendered":"How a Strait of Hormuz Closure Would Affect Austria"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-446620","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"Evidence from the KITE Model","text":"The Strait of Hormuz has been closed for more than two months, and with escalating tensions and failed negotiations, a prolonged closure appears likely. The KITE Computable General Equilibrium (CGE) model effectively captures the ongoing trade disruptions by simulating Gulf energy export shocks under both short-run (low substitution) and long-run (greater adjustment) scenarios. In the short run, Austria faces moderate negative effects: welfare declines by 0.15 percent, real wages drop by 0.15 percent, production loss equals 0.14 percent, and consumer prices rise by 0.15 percent, relative to the baseline, showing vulnerability through worldwide price spillovers. Long-run impacts are smaller: welfare loss falls to about 0.05 percent, and production nearly returns to baseline, highlighting the importance of short-term resilience measures like diversification, stockpiling, and targeted support for exposed sectors. Nevertheless, long-run adjustment does not eliminate the losses. The blockade of the Strait of Hormuz has far-reaching economic effects: in the short run, prices for crude oil rise by 12.1 percent, petroleum products by 8.3 percent, and natural gas by 7.9 percent, with spillovers into chemicals, electricity, plastics, and food, demonstrating how geopolitical shocks propagate through the economy.","onlinedate":"2026-05-08 09:00:00","lang":"English","publication_series":"","publication_date":"20260508","publication_date_year":"","publication_date_full":true,"publication_num_pages":"9","keywords":"[]","jelcodes":"[]","related_publications":"[]","pdf":446715,"zip":null,"link":"","monthly_report":true,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"3","journal":"WIFO Research Briefs","publisher":"","invisible":false,"external":false,"embargo_date":"2026-05-08 09:00:00","types":[44390],"research_groups":[3491],"collaboration":"","persons":[430223],"persons_data":"[{\"personId\":430223,\"personName\":\"Sujata Pokhrel\",\"organisationNames\":[]}]","clients":[],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","citations":"{\"apa\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_apa rendering_contributiontoperiodical rendering_apa rendering_contributiontoperiodical_apa\\\"><span>Pokhrel, S.<\\\/span> (2026). <span>How a Strait of Hormuz Closure Would Affect Austria: Evidence from the KITE Model<\\\/span>. <span><em>WIFO Research Briefs<\\\/em><\\\/span>, (3).<\\\/div>\",\"vancouver\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_vancouver rendering_contributiontoperiodical rendering_vancouver rendering_contributiontoperiodical_vancouver\\\"><span>Pokhrel S<\\\/span>. <span class=\\\"title\\\"><span>How a Strait of Hormuz Closure Would Affect Austria: <span class=\\\"subtitle\\\">Evidence from the KITE Model<\\\/span><\\\/span><\\\/span>. <span>WIFO Research Briefs<\\\/span>. 2026 May 8;(3).<\\\/div>\",\"bibtex\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_bibtex rendering_contributiontoperiodical rendering_bibtex rendering_contributiontoperiodical_bibtex\\\"><div>@misc{0f11c7a145c64324affca2572ade9edd,<\\\/div><div>  title    = \\\"How a Strait of Hormuz Closure Would Affect Austria: Evidence from the KITE Model\\\",<\\\/div><div>  abstract = \\\"The Strait of Hormuz has been closed for more than two months, and with escalating tensions and failed negotiations, a prolonged closure appears likely. The KITE Computable General Equilibrium (CGE) model effectively captures the ongoing trade disruptions by simulating Gulf energy export shocks under both short-run (low substitution) and long-run (greater adjustment) scenarios. In the short run, Austria faces moderate negative effects: welfare declines by 0.15 percent, real wages drop by 0.15 percent, production loss equals 0.14 percent, and consumer prices rise by 0.15 percent, relative to the baseline, showing vulnerability through worldwide price spillovers. Long-run impacts are smaller: welfare loss falls to about 0.05 percent, and production nearly returns to baseline, highlighting the importance of short-term resilience measures like diversification, stockpiling, and targeted support for exposed sectors. Nevertheless, long-run adjustment does not eliminate the losses. The blockade of the Strait of Hormuz has far-reaching economic effects: in the short run, prices for crude oil rise by 12.1 percent, petroleum products by 8.3 percent, and natural gas by 7.9 percent, with spillovers into chemicals, electricity, plastics, and food, demonstrating how geopolitical shocks propagate through the economy.\\\",<\\\/div><div>  author   = \\\"Sujata Pokhrel\\\",<\\\/div><div>  year     = \\\"2026\\\",<\\\/div><div>  month    = may,<\\\/div><div>  day      = \\\"8\\\",<\\\/div><div>  language = \\\"English\\\",<\\\/div><div>  journal  = \\\"WIFO Research Briefs\\\",<\\\/div><p>}<\\\/p><\\\/div>\",\"ris\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_ris rendering_contributiontoperiodical rendering_ris rendering_contributiontoperiodical_ris\\\"><p>TY  - GEN<\\\/p><p>T1  - How a Strait of Hormuz Closure Would Affect Austria<\\\/p><p>T2  - Evidence from the KITE Model<\\\/p><p>AU  - Pokhrel, Sujata<\\\/p><p>PY  - 2026\\\/5\\\/8<\\\/p><p>Y1  - 2026\\\/5\\\/8<\\\/p><p>N2  - The Strait of Hormuz has been closed for more than two months, and with escalating tensions and failed negotiations, a prolonged closure appears likely. The KITE Computable General Equilibrium (CGE) model effectively captures the ongoing trade disruptions by simulating Gulf energy export shocks under both short-run (low substitution) and long-run (greater adjustment) scenarios. In the short run, Austria faces moderate negative effects: welfare declines by 0.15 percent, real wages drop by 0.15 percent, production loss equals 0.14 percent, and consumer prices rise by 0.15 percent, relative to the baseline, showing vulnerability through worldwide price spillovers. Long-run impacts are smaller: welfare loss falls to about 0.05 percent, and production nearly returns to baseline, highlighting the importance of short-term resilience measures like diversification, stockpiling, and targeted support for exposed sectors. Nevertheless, long-run adjustment does not eliminate the losses. The blockade of the Strait of Hormuz has far-reaching economic effects: in the short run, prices for crude oil rise by 12.1 percent, petroleum products by 8.3 percent, and natural gas by 7.9 percent, with spillovers into chemicals, electricity, plastics, and food, demonstrating how geopolitical shocks propagate through the economy.<\\\/p><p>AB  - The Strait of Hormuz has been closed for more than two months, and with escalating tensions and failed negotiations, a prolonged closure appears likely. The KITE Computable General Equilibrium (CGE) model effectively captures the ongoing trade disruptions by simulating Gulf energy export shocks under both short-run (low substitution) and long-run (greater adjustment) scenarios. In the short run, Austria faces moderate negative effects: welfare declines by 0.15 percent, real wages drop by 0.15 percent, production loss equals 0.14 percent, and consumer prices rise by 0.15 percent, relative to the baseline, showing vulnerability through worldwide price spillovers. Long-run impacts are smaller: welfare loss falls to about 0.05 percent, and production nearly returns to baseline, highlighting the importance of short-term resilience measures like diversification, stockpiling, and targeted support for exposed sectors. Nevertheless, long-run adjustment does not eliminate the losses. The blockade of the Strait of Hormuz has far-reaching economic effects: in the short run, prices for crude oil rise by 12.1 percent, petroleum products by 8.3 percent, and natural gas by 7.9 percent, with spillovers into chemicals, electricity, plastics, and food, demonstrating how geopolitical shocks propagate through the economy.<\\\/p><p>M3  - WIFO series<\\\/p><p>JO  - WIFO Research Briefs<\\\/p><p>JF  - WIFO Research Briefs<\\\/p><p>ER  - <\\\/p><\\\/div>\"}","scientific_assistance":"[\"Fr\u00f6hlich Irene\"]","scientific_review":"[\"Christen Elisabeth\",\"Oberhofer Harald\"]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How a Strait of Hormuz Closure Would Affect Austria - WIFO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wifo.ac.at\/en\/publication\/446620\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How a Strait of Hormuz Closure Would Affect Austria\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.wifo.ac.at\/en\/publication\/446620\/\" \/>\n<meta property=\"og:site_name\" content=\"WIFO\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/WIFOat\/\" \/>\n<meta property=\"article:modified_time\" content=\"2026-05-08T19:31:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO-Gebaeude-FotoAlexanderMueller-www.alexandermueller.at-IMG_6326-Bearbeitet-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1280\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@WIFOat\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/446620\\\/\",\"url\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/446620\\\/\",\"name\":\"How a Strait of Hormuz Closure Would Affect Austria - 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