Strait of Hormuz caters to a fifth of global oil and gas produced from the production facilities and refineries in the Gulf to buyers across the world. (AI Generated Image) Global oil markets have been volatile, and the prices have seen some of the biggest swings in history this week after the US-Israeli war with Iran choked the flow of crude oil from the key passage of the Strait of Hormuz.
The Strait of Hormuz carries a fifth of global oil and gas produced from Gulf facilities and refineries to buyers worldwide. The significance of the strait can be adjudged by the volume of oil being transported on a daily basis, which is 20 million barrels, making it the busiest oil route in the world after the Strait of Malacca between Malaysia and Indonesia.
The Strait of Hormuz is also a significant trade route for cargoes of liquified natural gas (LNG), which are transported on super-chilled tankers, The Guardian reported. The Strait has effectively remained closed since the US-Israel launched strikes on Iran on February 28, and the Islamic nation resorted to attacking the US bases in the Gulf region.
Unlike the Strait of Malacca, which carries over 23 million barrels of oil a day to major buyers like China, South Korea, and Japan, the Strait of Hormuz is tough to bypass, given the geography, which in turn makes it one of the biggest chokepoints in the global oil and energy sector.
The Hormuz Strait connects the Persian Gulf to the west and the Gulf of Oman (and Arabian Sea) to the east. The Strait connects Iran to the north from Oman and the UAE to the south. At its narrowest point, the Strait of Hormuz is just 33 kilometres wide. And it is through this slender passage that the world’s 20% of crude and petroleum products pass to reach the wider global market.
However, the UAE, Saudi Arabia and other Gulf countries, which are major producers of oil and gas in the region, have built pipelines that effectively bypass the strait, but it accounts for only a fraction of the capacity which is being produced on a daily basis.
Iran has weaponised the strait after the US-Israel attack and the IRGC has threatened to “set ablaze” any vessel passing through the route, The Guardian reported.
German Foreign Minister Johann Wadephul on Thursday said a solution to the strategically important Strait of Hormuz can only be achieved diplomatically.
“A reliable and sustainable solution can only be achieved through diplomatic channels, and that is why I believe … that we should pool our common interests from the Gulf region, but also here in the neighbourhood,” Wadephul said during his visit to Turkey.