"The scale of what is at stake cannot be overstated. A partial slowdown lasting a week or two could be absorbed by oil companies. But a full or near full closure lasting a month or more would push crude oil prices well into triple digits and European natural gas prices toward or above the crisis levels seen in 2022."
"The Strait of Hormuz is a bending waterway, about 33 kilometers (21 miles) wide at its narrowest point. It connects the Persian Gulf to the Gulf of Oman. From there, ships can then travel to the rest of the world. While Iran and Oman have their territorial waters in the strait, it's viewed as an international waterway all ships can pass through."
"The war in Iran has ground tanker traffic through the Strait of Hormuz to a halt and oil prices have been swinging sharply, highlighting the important role the narrow passageway plays in global energy supply as the Islamic Republic vowed to block the region's oil exports, saying it would not allow even a single liter to be shipped to its enemies."
The Strait of Hormuz, a 33-kilometer-wide waterway connecting the Persian Gulf to the Gulf of Oman, serves as a critical global energy corridor handling 20% of the world's oil and natural gas. Tensions between the United States and Iran have created significant disruption risks, with the U.S. destroying Iranian mine-laying vessels to prevent strait closure. Recent attacks on ships and threats to block oil exports have caused oil price volatility. A partial slowdown lasting weeks could be absorbed by markets, but a full or near-full closure exceeding one month would push crude oil prices well into triple digits and European natural gas prices toward 2022 crisis levels, demonstrating the strait's critical importance to global energy security.
Read at Fortune
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