The threat of blocking the straits of the hormo
The global energy market is breathtaking the developments in the Middle East, as the likelihood of conflict escalations revives the fear of the future of the hormone.
This strategic ferry, the only maritime passage between the Gulf of Oman and the Persian Gulf, is the vital artery for 35% of the world marine trade of crude oil and 30% of liquefied natural gas (LNG) loads.
Experts estimate that, although unlikely, a complete interruption of the flow would have a more serious impact than the Red Sea crisis.
Dependence on the straits of the hormone is universal for the Persian Gulf countries. In addition to Iran, Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Qatar export their loads through this sea road.
The big difference with other crises, such as the one in the Red Sea, lies in the complete lack of alternative floating routes.
While in the Red Sea there is the possibility of bypass through the Cape of Good Hope, there are no similar solutions for the diversion of oil and LNG.
The only land alternatives are the Saudi Arabic pipeline (East to West) and a pipeline connecting the UAE deposits with the port of Fujaira, but their capabilities are not enough to meet global needs.
Even during the Iran-Iraq war (1980-1988), known as the « Tanker War », where the two sides attempted to disrupt the exports of the other, the straits of the Ormuz were never completely closed. However, every new crisis in the region restores the question of their safety.
Analysts consider an important interruption of flows as unlikely, as this will be the exports of Iran itself.
However, any exclusion attempt would have a « significant impact » on oil markets, leading to crude prices.
Such a development could reduce demand, negatively affecting transport costs.
The differentiation
Since October last year, Iran has made a small but important step in differentiation of its exports.
For the first time, it exported slow oil from the Jask Terminal, which is located outside the Persian Gulf in the Oman Sea. The $ 2 billion project is linked through a 1,000km pipeline with Gurech’s deposits in Busher province.
According to reports, at the end of September, Iran expired 1 million barrels of oil from Jask, while on October 2, the VLCC Dune tanker loaded 2 million barrels. Although Iran has been working for years to bypass the straits of the Ormuz -as 90% of the Iranian crude is exported from the island of Harg to the Persian Gulf -Jask’s proximity to the straits also means that this terminal will probably be affected.
