Will the “absolute nightmare” of the oil market occur with the closure of the Ormuz Strait? The Israeli army announced on Saturday night to carry out strikes in the Bandar Abbas region, a large port of southern Iran located in this narrow through which a fifth of global oil consumption passes. The Israeli military campaign launched on June 13 against the Islamic Republic has focused so far in the center and west of the country.
Since last week, Tehran seemed to prepare for the possibility of an American intervention when Washington had sent about thirty supply airplanes to Europe: this intervention finally happened last night. According to the New York Times, citing American intelligence reports, Iran has prepared missiles and other military teams for strikes against US bases in the Middle East.
Therefore, Tehran’s regime would be ready to retaliate against Americans who have officially joined Israelis in the Iranian nuclear installation campaign in Fordo. And even according to American daily life, the answer could be painful for Westerners. Iran could begin to undermine the Ormuz Strait, a tactic destined to immobilize US warships in the Persian Gulf, indicates US intelligence officials. That would not be without consequences for economic activities.
Because it is one of the most strategic places on the planet. The Ormuz Strait, between Iran and the United Arab Emirates, has been the subject of all attention since last Friday, after large -scale Israeli attacks on the Iranian soil, particularly aimed at nuclear sites and military leaders.
Several times, and especially since the worsening of US sanctions in 2018, Iran has threatened to block this narrow if their vital interests threatened, without, however, however. This perspective is described as “absolute nightmare” by Arne Lohmann Rasmussen, Chief Analyst of Global Risk Management, cited by AFP.
The black gold exit door
21% of world oil consumption and a quarter of liquefied natural gas exchanges (LNG) go through this narrow, with a minimum of 55 kilometers, according to EIA (Energy Information Agency).
This is the Gold Golden Gate of Black Gold produced by 5 of the 10 largest world producers (Saudi Arabia, Iran, Iraq, United Arab Emirates and Kuwait). 20 million barrels are passed there through two narrow navigation corridors. Therefore, its proper functioning is essential for the supply of global energy, in particular Europe and China.
A block would also penalize Iran
At the moment, the risk of blocking this narrow is still theoretical even if it becomes heavier due to the last developments in the conflict. At least two reasons could deter Iran of implementing their threats. First, it would probably cause a serious escalation of war. In addition, a block would probably aggravate the economic difficulties of Iran, directed by international sanctions and very dependent on its energy exports.
Hashran has managed to maintain high exports by ignoring the sanctions. According to El Economista, the hydrocarbons sector has reported between 35 and $ 50 billion in the country in 2023 (between 8.7 and 12.3% of its GDP). 95% of their crude oil exports are intended for China according to the Economic Weekly.
The closure of the Ormuz Strait is a fear of long dates to the Petromarchies of the Gulf, particularly from the Iran-Iraq War (1980-1988). Some countries have deployed significant investments to protect them, such as Saudi Arabia, which has built a network of pipelines that connect the oil fields in the east of the Red Sea (west), from which hydrocarbons can be exported in case of difficulty in the Persian Gulf.
Source: BFM TV
