In recent news, an unfortunate occurrence of sabotage affected four commercial vessels near Fujairah, one of the largest bunkering hubs worldwide and a part of the United Arab Emirates. This incident coincides with a period of heightened tension in the region known as the Gulf. It’s worth noting that the United States has stepped up its military presence in the area with the deployment of an aircraft carrier, defense missiles, and bomber planes due to increasing conflict with Iran. The current dispute with Iran began when the US successfully halted Iran’s energy exports, causing Iran to threaten to block oil shipments through the Strait of Hormuz.
Background of the Tensions
The origins of these geopolitical tensions can be traced back to 2015. During this year, Iran agreed to a long-term agreement known as the Joint Comprehensive Plan of Action (JCPOA) on its nuclear program with P5+1, which includes the United States, United Kingdom, France, China, Russia, and Germany. As per the agreement, Iran consented to limit its sensitive nuclear activities and permit international inspectors in exchange for the removal of debilitating economic sanctions.
However, the US pulled out from this deal in 2018 and proceeded to eliminate exceptions to US sanctions on Iranian oil recently. These sanctions have cornered Iran’s economy, pushing it towards a crisis. Following these developments, Iran has issued threats to reduce its compliance with the 2015 nuclear deal and to close the Strait of Hormuz.
Significance of the Strait of Hormuz
The Strait of Hormuz plays a crucial role in geopolitical and economic affairs, as it separates Iran and Oman, thereby linking the Persian Gulf with the Gulf of Oman and the Arabian Sea. Although the Strait is 33 km wide at its smallest point, the navigational channel only extends for three km in each direction.
| Country | Association |
|---|---|
| Saudi Arabia | Member of Organization of the Petroleum Exporting Countries (OPEC) |
| Iran | Member of Organization of the Petroleum Exporting Countries (OPEC) |
| UAE | Member of Organization of the Petroleum Exporting Countries (OPEC) |
| Kuwait | Member of Organization of the Petroleum Exporting Countries (OPEC) |
| Iraq | Member of Organization of the Petroleum Exporting Countries (OPEC) |
World’s Oil and LNG Transportation through the Strait
Nearly all crude exported from Saudi Arabia, Iran, the UAE, Kuwait and Iraq – all OPEC members – is transported via the Strait. Additionally, it is the route for nearly all of the liquefied natural gas (LNG) produced by Qatar, the world’s largest LNG exporter. To bypass the strategic Strait, both the UAE and Saudi Arabia have sought alternative routes, including the construction of additional oil pipelines.
