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GENERAL KNOWLEDGE TROUGH MAP - STRAIT OF HORMUZ

  • KIPS Bureau
  • July, 2018
  • 651
  • CSS

The Strait of Hormuz is the main maritime route through which Persian Gulf oil exporters (Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates) ship their oil to the world. This passageway is the most efficient and cost-effective route through which these producers transport their oil to East Asia.

A strait is a naturally formed, narrow, typically navigable waterway connecting two larger bodies of water.

Do You Know?

The strait is 21 miles wide at its narrowest point.

It is a narrow strait located between the Gulf of Oman and the Persian Gulf.

Iran borders the Strait of Hormuz to the North, and the United Arab Emirates and Oman's Musandam Peninsula border it to the South.

Iran and Saudi Arabia have alternative access routes to maritime shipping lanes.

Approximately 17 million barrels of oil pass through the strait per day.

About 35% of all seaborne oil exports pass through the strait per day.

Significance

A disruption in the strait would obstruct the timely shipment of oil to the markets. This would cause exporters to lose significant revenue, and importers would face supply shortages and higher costs. The losses are directly proportional to the duration of the disruption.

Persian Gulf countries depend heavily on revenue from these exports.

Threats

Sectarian rivalry.

Iran’s threat to shutdown the strait.

Current Situation

As Trump Abandoned Iran Nuclear Deal on 8th of May 2018, the consequences can be severe, not only for the Iran and other signatories but for the world. Iran, OPEC's third-largest oil producer, is positioned on the shores of the Strait of Hormuz. In the past, Iran has threatened to shut the strait. Now, if the conditions further deteriorate, it can actually impose oil embargo and can blockade the Strait of Hormuz. 

Mitigation of the Risk

Relying on alternate export routes

Building security alliances with countries that have a vested interest in keeping the strait open.

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