THE world is facing economic collapse similar to the 2008 crash if the closure of the Strait of Hormuz continues until August, according to new analysis.

The report by Rapidan Energy Group (REG) published on Thursday says that if the strait reopens in July, it expects to see “an average oil demand reduction of 2.6 million barrels a day and the spot-market price for benchmark Brent crude peaking near $130 (£96) a barrel over the summer.”

But if the strait remained closed until August, Rapidan says this will cause the oil supply deficit to grow to 6 billion barrels per day in the third quarter of the year.

“The current macro setup is less extreme than the 1970s or 2007 to ’08,” the agency quoted Rapidan analysts as saying in a note. 

“But that relatively stronger starting point doesn’t neutralise the risk that continued oil price spikes would exacerbate financial and macroeconomic vulnerabilities.”

The International Energy Agency warned on Thursday that the peak of summer fuel demand coupled with a lack of new supply from the Middle East ‌meant the market could enter the “red zone” in July and August.

Iran has said it aims to reopen the strait to friendly countries that abide by its terms and could potentially include fees.

US Secretary of State Marco Rubio said such a move by Iran would be “a threat to the world,” ​and would be “completely illegal.”

On February 28, the United States and Israel launched an illegal and unprovoked attack against Iran.

Iran later announced a large-scale retaliatory operation against Israel and US military facilities in Bahrain, Jordan, Iraq, Qatar, Kuwait, the UAE, and Saudi Arabia.

Iranian authorities subsequently decided to close the Strait of Hormuz to vessels associated with the US, Israel, and countries that supported actions against them.