How the Strait of Hormuz is at the heart of spiraling tensions with Iran

Tensions between the West and Iran bubbled to a historic height in recent days after the assassination of top Iranian military commander Qassem Soleimani and Tehran bombed two Iraqi bases that housed US troops.

They have sparked fears of wider US-Iran attacks in the greater region, which could take place in and around the Strait of Hormuz, a narrow body of water linking the Persian Gulf to the Gulf of Oman, which feeds into Arabian Sea and the rest of the world.

While Iran’s leaders claim to have “concluded” their revenge for Soleimani’s death — and President Donald Trump appears to believe them — many regional experts and diplomatic sources say Iran could unleash other modes of attack, which include unleashing allied militias to disrupt the Middle East.

One strategy could include Iran closing the Strait of Hormuz, which would stop oil tanker traffic, disrupt global oil supply, and send prices shooting up.

Here’s what you need to know about this valuable strait.

Why is the Strait of Hormuz important?

Though the strait is tiny — at its narrowest point it is just 33 km (21 miles) across — it’s a geopolitically and financially crucial chokepoint.

It’s the world’s busiest shipping lane, chiefly because there are limited alternatives to bypass the strait. Most of the oil that passes through the strait come from Saudi Arabia, the US Energy Information Administration (EIA) reported.

Some 21 million barrels of crude and refined oil pass through the strait every day, the EIA said, citing 2018 statistics.

That’s about one-third of the world’s sea-traded oil, or $1.2 billion worth of oil a day, at current oil prices.

How important is the strait to the US and its allies?

The US and many of its allies have billion-dollar reasons to protect the Strait of Hormuz.

The majority of Saudi Arabia’s crude exports pass through the Strait of Hormuz, meaning much of the oil-dependent economy’s wealth is situated there. Saudi state-backed oil tanker Bahri temporarily suspended its shipments through the strait after Iran’s missile strikes in Iran, the Financial Times reported.

The UK Royal Navy has also sent vessels to escort British ships to protect them from potential attacks amid the heightened tensions, the Press Association reported.

It has good reason to worry: last July, Iran’s Revolutionary Guards seized two British oil tankers sailing in the strait’s international waters and, according to the UK, attempted to harass another British tanker.

Last June Iran shot down a US drone flying near the strait, and a month later a US warship — USS Boxer — also shot down an Iranian drone in the same area.

Shortly after Iran’s drone attack, President Donald Trump questioned the US’ presence in the region, and called on China, Japan, and other countries to protect their own ships passing through the Strait of Hormuz.

Trump noted that much of China and Japan’s oil flow through the strait, and added: “So why are we protecting the shipping lanes for other countries (many years) for zero compensation.”

While a large proportion — 76% — of oil flowing through the chokepoint does end up in Asian countries, the US still imports more than 30 million barrels of oil a month from countries in the Middle East, Business Insider has reported, citing the EIA.

That’s about $1.7 billion worth of oil, and 10% of the US’s total oil imports per month.

How do US-Iran tensions affect it?

Oil prices swung wildly as news broke of Iran’s missile strikes on US targets and the subsequent relief that neither lives nor energy infrastructure were harmed.

Iranian leaders, who have also vowed retaliation for the death of Soleimani, have threatened to close down the strait multiple times in the past.

If Iran followed through with these threats, it would likely cause huge disruption to the global oil trade. As the strait is so narrow, any sort of interference in tanker traffic could decrease the world’s oil supply, and send prices shooting up.

Global oil prices have proven vulnerable to tensions between Iran and the West before. After the Trump administration said in April 2019 it would stop providing sanctions waivers to countries who purchase Iranian oil, prices rose to their highest level since November the year before, Axios reported.

And because the US would be affected by global oil prices, regardless of the origin of the oil, Washington would still have an interest in protecting the Strait of Hormuz.

Kenneth Vincent, an economist at the Department of Energy, told a 2017 conference, cited by The Atlantic: “The origin of whatever molecules are consumed in the United States does not matter.”

“What matters is that if there’s a shooting war somewhere in the Middle East, those molecules will cost more and that will harm the American economy,” he said.

How likely is Iran to shut down the strait?

Iran is more likely to disrupt traffic in the Strait of Hormuz than to engage in an all-out conventional war with the US, which is much stronger militarily.

But doing so comes with high costs to Iran.

To close down the entire strait, Iran would have to place at least 1,000 mines with submarines and surface craft along the chokepoint, security researcher Caitlin Talmadge posited in a 2009 MIT study. Such an effort could take weeks, the study added.

Disrupting oil traffic on the strait would also result in oil importers around the world looking beyond the Middle East for their sources, and further reduce reliance on the region.

Iran’s oil industry is already suffering after the US imposed sanctions designed to stop countries from importing Iranian oil earlier this year.

As Michael Knights, a Middle East expert at the Washington Institute think tank, told The Atlantic last May: “They’d be cutting their own throat if they close the strait.”/insider/