In light of growing hostilities with the United States, Iran has signaled its willingness to shut the vital Strait of Hormuz shipping route. This recent development follows the US decision to tighten sanctions on Iran and eliminate Significant Reduction Exceptions (SREs) waivers. While Iran has stated its intention to persist in selling its oil and utilizing the Strait of Hormuz, it has clarified that any prevention from doing so could result in the closure of the strait.
An Overview: Strait of Hormuz
Often referred to as the Strait of Ormuz, this channel connects the westward Persian Gulf with the eastern Gulf of Oman and Arabian Sea. Varying between 35 to 60 miles in width (55 to 95 km), this strait geographically separates Iran (‘north’) from the Arabian Peninsula (‘south’). Three islands are contained within the strait – Qeshm (Qishm), Hormuz, and Hengām (Henjām). The strategic and economic significance of this channel cannot be overstated.
The Strategic Importance of Strait of Hormuz
Acting as a crucial link between the Indian Ocean and the Arabian/Persian Gulf, the Strait of Hormuz segregates Iran from Oman and the United Arab Emirates. It serves as a strategic conduit that connects the Middle East with regions like Asia Pacific, Europe, and North America.
The Role of the Strait in Commercial Shipping
Historically, the Strait of Hormuz has facilitated the exchange between Arab and Persian civilizations and the Indian subcontinent, Pacific Asia, and the Americas. Essential products like porcelain from China and spices from the Indochina peninsula have frequently passed through this strait en route to Central Asia and Europe.
Shipping traffic from energy-rich Gulf countries converges in the strait. This includes crucial exports like crude oil and liquefied natural gas from countries such as Iran, Iraq, Kuwait, Bahrain, Qatar, Saudi Arabia, and the United Arab Emirates. Surprisingly, 30% of the world’s crude oil trade transits through the Strait of Hormuz. This strait is also the shipping route for nearly all the liquefied natural gas (LNG) from Qatar, a leading exporter.
| Fact | Details |
|---|---|
| Width of Strait | 35 to 60 miles (55 to 95 km) |
| Trade Percentage via the Strait | 30% of the world’s crude oil trade |
| Key Goods Transported | Crude oil, Liquefied Natural Gas |
| Main Exporters | Iran, Iraq, Kuwait, Bahrain, Qatar, Saudi Arabia, United Arab Emirates |
Possible Implications of the Strait’s Closure
If the Strait of Hormuz were to be closed or even threatened with closure, this could trigger a surge in the price of crude oil, due to supply concerns paired with unstable stock markets. Trade disruption between the Middle East and the rest of the world might be inevitable as commercial ships may refuse to risk confrontation with the Iranian Navy. Furthermore, the geopolitical repercussions could be considerable, given that the U.S. Navy’s Central Command is stationed in the Persian Gulf. Any conflict between the US and Iran could escalate, leading to broader security implications within the entire region.
