Strait of Hormuz
The Strait of Hormuz is important maritime route. It connects the Persian Gulf with the Gulf of Oman. Recent tensions between Iran and the United States have raised concerns about the possibility of Iran blocking this vital waterway. This action could have implications for global oil and gas markets, particularly affecting countries dependent on energy supplies from the region.
Geographical Importance of the Strait of Hormuz
The Strait of Hormuz is only 33 kilometres wide at its narrowest point. It serves as a vital shipping lane for oil and liquefied natural gas (LNG). Approximately 20 million barrels of oil flow through the strait each day. This represents over one-quarter of the world’s seaborne oil trade. The strait is bordered by Iran and Oman, making its control strategically .
Economic Impact of Disruption
Blocking the Strait of Hormuz would have immediate consequences. Global oil prices would likely surge. This is due to the high dependency of several countries on oil transported through the strait. The United States Energy Information Administration (EIA) reports that around 83% of LNG trade also transits this route. Disruptions would lead to increased shipping costs and could destabilise global markets.
Iran’s Strategic Calculations
Historically, Iran has refrained from fully blocking the strait. During the Iran-Iraq War, both nations attacked vessels but did not halt traffic. Iran relies on the strait for its own oil exports, especially to China, which purchases Iranian oil at discounted prices. Disrupting the strait would also jeopardise Iran’s economic interests, as it would alienate potential allies in the region.
Military Presence and Global Response
The United States maintains a military presence in the region, including the 5th Fleet stationed in Bahrain. This allows for a rapid response to any threats posed by Iran. However, any military engagement would create chaos in global shipping. Iran’s potential actions could provoke military response from the US, escalating tensions further.
Implications for India
India imports a substantial portion of its crude oil from the Strait of Hormuz. In 2024, about 84% of India’s crude oil imports came through this route. A blockage would affect India’s energy security and lead to price fluctuations. Although India sources oil from various regions, the impact of price volatility would be felt across its economy.
Alternatives to the Strait of Hormuz
While there are alternative routes for oil transport, they are not as efficient. Saudi Arabia operates a pipeline to the Red Sea, and the UAE has a pipeline to the Gulf of Oman. However, these alternatives cannot fully replace the volume of oil transported through the Strait of Hormuz. Any disruption would still have far-reaching effects on global oil supply chains.
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