Strait of Hormuz

The Strait of Hormuz is the narrow passageway between the Persian** Gulf and the Indian Ocean.  Iran, Iraq, the United Arab Emirates and Saudi Arabia all rely on ocean-going oil tankers to export around 35% of the global supply of natural gas and 20% of the world’s oil supply.  At its narrowest point, the Strait is 21 miles wide.  But that is deceptive; the 20 to 30 ships using the Strait each day are confined to two two mile wide transit lanes separated by a 2 mile “median strip.”  

**Saudi Arabia, Oman, Bahrain, Kuwait, Qatar, the UAE and all the members of the Gulf Cooperation Council wish to point out that the waterway is really The Gulf of Oman and their official government maps prove it!

The bad news is that it’s easy to use small speed boats to attach mines to boats or stay onshore and fire artillery shells or launch rockets.  The good news is that modern oil tankers are built with double hulls and sealed compartments to minimize the chances of an oil spill which makes them very difficult to sink. 

During the protracted Iraq-Iran War of the 1980’s Iraq initiated attacks on tankers carrying crude from Iran and over time Iran retaliated with attacks on ships leaving Iraqi ports.  The attacks hit only a small proportion of the tanker fleet and had a comparatively small effect on the global economy as other members of OPEC increased production to make up for the loss.  A major factor suppressing the damage and controlling the level of violence was the use of the U.S. Navy to escort ships in the Gulf. 

While oil from the Gulf is a smaller proportion of global supply than it was 35 years ago, Iran has a much larger and more sophisticated military capability than it did back then and could most likely damage a significant portion of the tanker traffic.  The impact on global markets and the world’s economies may be more influenced by fears and uncertainty about the future than the physical disruption in supply.