Strait of Hormuz, the world’s most important chokepoint for oil

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A MH-60S helicopter hovers in the air with an oil tanker in the background as the USS John C Stennis makes its way to the Gulf through the Strait of Hormuz in this file photo dated, December 21, 2018. The strait is the single most important waterway for global trade in crude oil, with tankers hauling about 17.5mn barrels passing through it daily, Bloomberg tanker tracking shows.

Iran is threatening to block all oil shipments through the Strait of Hormuz if the US succeeds in halting exports from the Gulf nation. Here’s why the waterway matters so much to the global economy.


What is the Strait of Hormuz?
It’s a V-shaped body of water that connects the Arabian Gulf to the Indian Ocean. Iran is to the north and the UAE and Oman to the south. It’s about 96 miles long and 24 miles wide at its narrowest point. The shipping lanes in each direction are just two miles wide, with a 2-mile buffer zone between them.


Why is it important?
The strait is the single most important waterway for global trade in crude oil, with tankers hauling about 17.5mn barrels passing through it daily, Bloomberg tanker tracking shows. That’s equal to about 40% of all the crude traded internationally. All oil exports from Kuwait, Iran, and Bahrain, more than 90% of those from Saudi Arabia and Iraq, and 75% of shipments from the UAE pass through it.


Could Iran close the strait?
The shipping lanes through the strait itself lie in Omani territorial waters, but immediately to the west they pass either side of the Tunb Islands, seized by Iran in 1971. The shallow depth makes shipping vulnerable to mines, while the proximity to Iran leaves large tankers open to attack from shore-based missiles. While the Iranian navy may be no match for the US Fifth Fleet and other forces, it could still do considerable damage. Shipping lanes would probably re-open within weeks, but even a temporary halt would test the limits of strategic oil stockpiles held around the world, including in the US.


Has the strait ever been closed?
The waterway has never been closed to traffic, although the threat has been made on several occasions. During the 1980-1988 Iran-Iraq War, Iraqi forces attacked Iran’s oil export terminal at Kharg Island, in part to provoke an Iranian retaliation that would draw the US into the conflict. Although Iran didn’t try to shut the strait, the so-called Tanker War significantly raised the cost of insuring vessels, increasing the cost of oil exports. When sanctions were imposed on Iran in 2011, threats were made to close the strait, but these were subsequently denied by Iran’s foreign ministry.

Sources and photo-credits: Reuters, Gulf Times