Recent tensions between Iran and the USA are threatening the safety of the world’s ships and movement oil in the Strait of Hormuz today.
The narrow strait is the most important choke point for the world’s oil supply. Some 21 million barrels — or $1.2 billion worth of oil — pass through the strait every day.
One way Iran could exact its revenge on the US regime and its allies is by shutting or harassing tankers in the strait, which would disrupt oil supply and send prices shooting up.
Tensions between the West and Iran bubbled to a historic height in recent days after the assassination of top Iranian military commander Qassem Soleimani and Tehran bombed two Iraqi bases that housed US occupation troops.
They have sparked fears of wider US-Iran attacks in the greater region, which could take place in and around the Strait of Hormuz, a narrow body of water linking the Persian Gulf to the Gulf of Oman, which feeds into Arabian Sea and the rest of the world.
Though the Strait of Hormuz is tiny — at its narrowest point it is just 33 km (21 miles) across — it’s a geopolitically and financially crucial choke point.
It’s the world’s busiest shipping lane, chiefly because there are limited alternatives to bypass the strait. Most of the oil that passes through the strait come from Saudi Arabia, the US Energy Information Administration (EIA) reported.
Some 21 million barrels of crude and refined oil pass through the strait every day, the EIA said, citing 2018 statistics.
That’s about one-third of the world’s sea-traded oil, or $1.2 billion worth of oil a day, at current oil prices. The USA and many other in- en export entities have billion-dollar reasons to protect the Strait of Hormuz.
Most of Saudi Arabia’s crude exports pass through the Strait of Hormuz, meaning much of the oil-dependent economy’s wealth is situated there. The other Saudi crude oil shipping lane runs through the Red Sea, along Yemen’s coastline into the Arabian Sea.
The UK Royal Navy has also sent vessels to escort British ships to protect them amid the heightened tensions, after the brutal killing of General Soleimani.
Shortly after Iran’s drone attack, President Donald Trump called on China, Japan, and other countries to protect their own ships passing through the Strait of Hormuz.
A large proportion — 76% — of oil flowing through the choke point does end up in Asian countries, the USA still imports more than 30 million barrels of oil a month from countries in the Middle East.
That’s about $1.7 billion worth of oil, and 10% of the US’s total oil imports per month.
Iran is more likely to disrupt traffic in the Strait of Hormuz than to engage in an all-out conventional war with the USA, which supposed to be much stronger militarily.
To close down the entire strait, Iran would have to place at least 1,000 mines with submarines and surface craft along the choke point.
However, Iran’s oil industry is already suffering after the US imposed sanctions designed to stop countries from importing Iranian oil earlier this year.
Yahoo / ABC Flash Point News 2020.