The Strait of Hormuz, through which the Persian Gulf lies, is one of the world\u2019s critical maritime trade routes dubbed oil highways where most of the exports of oil from the Persian Gulf head to their markets. About 20 to 25 percent of the world\u2019s oil traveling by sea for countries worldwide flows through the Strait of Hormuz between Iran and Oman.<\/p>\n\n\n\n
A small waterway between Iran and Arab states at the tip of the Middle East is a vital artery for the oil-rich countries of the region – and a crucial trade route for countries all over the world, especially those in Asia. The flow of oil through the Strait of Hormuz – a relatively narrow channel – could easily be brought to a halt in the event of a blockade, causing dramatic increases in oil prices, shortages and economic chaos wherever trade depends on oil.<\/p>\n\n\n\n
The Strait is the only passage for vessels through which they can exit the Persian Gulf. As such, it is an important waterway as oil producing countries such as Saudi Arabia, Iraq, Kuwait and the UAE all export oil through the waterway. Approximately 80\u201385% of the world’s oil supply that is transported through the Strait is destined for Asia.<\/p>\n\n\n\n
One-third of world oil shipments passes through the area known as the Strait of Hormuz, averaging 20 million barrels per day. Thus, the area plays a significant role in global energy supply.<\/p>\n\n\n\n
Several Gulf countries rely heavily on the Strait of Hormuz to export their oil:<\/p>\n\n\n\n
Saudi Arabia, producer of around 7 percent of global oil demand, is the world’s largest oil exporter through the Strait of Hormuz, accounting for 37% of total Saudi oil exports. While the Saudis have developed additional pipeline exports and are increasingly sending oil around Africa on ships, the Hormuz waterway remains the primary conduit for Saudi oil exports.<\/p>\n\n\n\n
Iraq’s oil exports through the Strait of Hormuz account for about 22-23% of the total oil that is exported through the waterway.<\/p>\n\n\n\n
More than 13 percent of the world\u2019s oil supply travels through the Strait of Hormuz, a vital shipping channel to the Arabian Gulf. While most of the UAE\u2019s oil production is pipeline-fed to coastal shipping terminals, a significant volume is also exported through the country\u2019s two refineries, one based in Dubai and the other in Fujairah.<\/p>\n\n\n\n
In addition to the aforesaid uses, Iran itself depends on the narrow waterway for exporting its oil, amounting to about 10\u201311% of total vessel traffic in the area.<\/p>\n\n\n\n
The Strait of Hormuz is a vital oil export transportation corridor for several oil exporting countries. In addition to Iran, Saudi Arabia and UAE also depend on the Strait of Hormuz to export their oil and liquefied natural gas (LNG) to customer markets. Other Gulf countries, including Kuwait, Qatar and Bahrain, also use the waterway to export the majority of their products.<\/p>\n\n\n\n
While Gulf countries depend on Hormuz for exports, Asian economies are the biggest consumers of this oil.<\/p>\n\n\n\n
More than one-third of the oil that traverses the world’s second longest strait globally, the Strait of Malacca, comes from China. With China’s energy demand increasing rapidly, keeping open the oilway through the Strait, which some have dubbed the “third oilway,” is critical.<\/p>\n\n\n\n
India is one of the most exposed countries:<\/p>\n\n\n\n
This makes India extremely vulnerable to disruptions.<\/p>\n\n\n\n
Japan imports up to 95% of its oil from the Middle East. Much of this oil flows through the narrow waterway known as the Strait of Hormuz, for which Japan has a particular dependence given its limited domestic resources.<\/p>\n\n\n\n
About 70 percent of South Korea’s oil imports come from the Middle East, much of it passing through the strategic Hormuz Strait.<\/p>\n\n\n\n
Colombia is one of the economies most exposed to supply shocks.<\/p>\n\n\n\n
Countries such as:<\/p>\n\n\n\n
The oil supply to Malaysia and Singapore, which consume more than 80% of their oil imports through the Strait, has been affected.<\/p>\n\n\n\n
Some countries will be affected more than others by potential trade-related market disturbances; the following countries are among the most vulnerable:<\/p>\n\n\n\n
Asia consumes a majority share of the world\u2019s oil supply, and much of that oil flows through the Hormuz Strait.<\/p>\n\n\n\n
The region is most vulnerable compared to the rest of the world, given rising geopolitical tensions or the possibility of a future blockade.<\/p>\n\n\n\n
A global crisis that could cripple international trade and dramatically alter the global oil market. The Strait of Hormuz is the only passage to the sea for some of the world\u2019s largest oil suppliers. The 82-mile-wide channel divides Iran from Oman, and millions of barrels of oil traverse it every day.<\/p>\n\n\n\n
Recent developments in the political arena have already affected global trade as disruptions and shifting alliances prompt various countries to seek alternative means to fulfill their needs. In line with this evolving landscape, the world is poised to pay close attention as the United States takes its next move regarding trade.<\/p>\n\n\n\n
The Strait of Hormuz is one of the vital energy transport corridors around the world. It is a critical waterway for the Gulf countries as an export route for their oil, and for Asian countries that rely heavily on the Strait for their energy needs, these countries are China, India, Japan, and South Korea.<\/p>\n\n\n\n
The world’s oil supply could be crippled if it becomes bottlenecked in a 80-mile-wide channel – and that’s exactly what’s happening through the Strait of Hormuz. As other approaches and alternative suppliers are being blocked, as strategic oil reserves are being built up, the strategic importance of the Strait is increasing.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Strait of Hormuz, through which the Persian Gulf lies, is one of the world\u2019s critical maritime trade routes dubbed oil highways where most of the exports of oil from the Persian Gulf head to their markets. About 20 to 25 percent of the world\u2019s oil traveling by sea for countries worldwide flows through the […]<\/p>\n","protected":false},"author":5,"featured_media":4032,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[94,70,96,92,85,112,102],"tags":[],"ppma_author":[47],"class_list":["post-4031","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-countries-regions","category-economy","category-global-affairs","category-government-administration","category-news-current-affairs","category-society"],"blocksy_meta":[],"yoast_head":"\n