Iran to block key oil choke point after US strikes? Why Strait of Hormuz matters

Iran's parliament has approved a measure to close the Strait of Hormuz, a strategic global oil choke point, following the US's strikes on the Islamic Republic's three nuclear sites, state-run media reported on Sunday.However, the Supreme National Security Council, Iran's top security authority, is required to finalise the decision, said Major General Kowsari, a member of the parliament's National Security Committee.advertisementIf Iran goes ahead and shuts down the Strait of Hormuz, through which 20 per cent of daily global oil consumption passes, it would disrupt trade flows, send oil prices shooting up and potentially destabilising the global economy.
Such a move could further create instability in the Middle East, which has been witnessing escalating tensions in the past 20 months, following Israel's wars with Hamas and Hezbollah in Gaza and Lebanon and the conflict with Iran, and the fall of the long-time autocratic President Bashar al-Assad in Syria.WHAT IS STRAIT OF HORMUZ AND ITS SIGNIFICANCE?The Strait of Hormuz is a narrow but vitally important waterway that connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. It lies between Iran on the north coast and the Musandam Peninsula - which belongs to Oman and the United Arab Emirates - on the south.advertisementThe strait is approximately 167 km long, narrowing to just about 33 km at its narrowest point, with designated three-kilometre-wide shipping lanes for incoming and outgoing maritime traffic.The strait serves as the sole maritime passage for oil tankers transporting crude oil from the Persian Gulf, making it one of the world's most critical choke points for global energy security. Roughly 17 million barrels of oil per day - or about 20 to 30 percent of the world's total oil consumption - pass through the Strait of Hormuz.In fact, about 88 percent of all oil exports from the Persian Gulf must transit this narrow waterway, as alternative pipelines and routes are limited. Beyond oil, about a third of the world's liquefied natural gas also moves through the corridor.WHAT WILL HAPPEN IF THE STRAIT IS CLOSED?If Iran were to close or block the Strait of Hormuz, it would disrupt the flow of a significant portion of global oil exports, causing major supply shortages and triggering sharp increases in oil prices.OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia. The UAE and Saudi Arabia have sought to find other routes to bypass the strait.advertisementAbout 2.6 million barrels per day (bpd) of unused capacity from existing UAE and Saudi pipelines could be available to bypass Hormuz, the U.S. Energy Information Administration said in June last year.As the strait is so narrow and militarily sensitive, attempts to block it could further inflame regional tensions and potentially provoke international naval responses due to the economic and geopolitical stakes involved.HOW INDIA WILL BE AFFECTED IF HORMUZ SHUTS DOWN?Though India has diversified oil and energy supply partners, including Russia and a few Arab nations, but a large part of its supply also comes from Iran.Experts believe that the closure of the Strait of Hormuz could impact Indian supplies, which could lead to an increase in oil prices that further influence commodity pricing.In an interview with India Today TV, Union Petroleum Minister Hardeep Singh Puri allayed concerns about a spike in oil prices amid the Israel-Iran conflict, saying the situation was manageable and energy rates were under control.CAN IRAN REALLY BLOCK STRAIT OF HORMUZ?Generally, Iran does not have legal authority to stop shipping traffic through the key oil choke point. This needs to be achieved either by force or threat of force, Bloomberg News reported.advertisementIf the Iranian navy tried to bar entry to the strait, it could face a strong response from the US Fifth Fleet and other Western navies patrolling the area.Closing the Hormuz will also impact Iran economically, as it would prevent Tehran from exporting its petroleum. Iran itself depends on transit for its oil exports, with an export terminal present at Jask, located at the eastern end of the strait, according to Bloomberg News.Such a move will also leave China flustered as it is the biggest buyer of Iranian oil and a key partner that used its veto power at the UN Security Council to protect Iran from facing Western-led sanctions or resolutions.(with inputs from Reuters)Must Watch
IN THIS STORY#Iran#Israel#Middle East#Donald Trump

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