The strategic importance of the Strait of Hormuz.
The Strait of Hormuz is a narrow waterway that lies between Iran and Oman. Dozens of tankers carry oil through the 21-mile-wide passage each day. This flow of oil represents 20 percent of the world’s supply.
Most of the tankers traveling through the Strait of Hormuz are bound for Asia. But an attack on any tanker there, regardless of its destination, can affect the price of oil everywhere. That’s because oil is a globally traded product — a drop in supply from the Persian Gulf can drive up prices from other sources around the world. After two tankers were attacked in June, the price of Brent Crude — oil sourced from the North Sea — jumped by nearly $2 per barrel.
The attacks in June weren’t the only incidents in Hormuz in recent months. Several other oil tankers have been seized, attacked, and harassed. These tankers — and this narrow water passage — have become a center of conflict between the US and Iran. It’s a conflict with the potential to escalate in one of the world’s most important oil chokepoints, sending the global economy into a tailspin.
Author: Danush Parvaneh