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Strait of Hormuz: why it is important for global energy security
Strait of Hormuz: What to know about this critical oil chokepoint; why it is important for global energy security
This route is also vital for the Asian markets. Over 80% of the oil and LNG transported through this strategic chokepoint goes in Asian markets. Major economies such as China, India, Japan, and South Korea depend heavily on this critical chokepoint.
Iran's Islamic Revolutionary Guard Corps has announced on Thursday that it will carry out a two-day live-fire naval exercise in the Strait of Hormuz staring Sunday, February 1, as per Iranian state media. The announcement came amid heavy US naval deployments in the region.
However, an Iranian official on Sunday said Tehran had no such plans to conduct live-fire exercises in the strait. The US military on Friday issued a statement urging Iran not to proceed with such exercise and warned it to refrain from taking actions that could pose “unnecessary risk.”
The drill may have heightened risks in one of the world's most vital maritime chokepoints.
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Amid all this chaos, the major flashpoint was the Strait of Hormuz. Let's understand its strategic importance, possible alternatives, its location on the map, and related factors.
Strait of Hormuz
The Strait of Hormuz is a narrow waterway situated at the mouth of the Persian Gulf, bordered by Iran to the north and Oman (along with a portion of the United Arab Emirates) to the south. It connects the Persian Gulf to the Gulf of Oman and ultimately the Arabian Sea, serving as the only sea passage from the oil-rich Persian Gulf to the open ocean. At its narrowest point, the strait is only about 21 miles (33 kilometers) wide, making it a geographic chokepoint. It's often described as a "critical oil chokepoint."
Strategic significance
Geopolitically, the Strait of Hormuz is one of the world's most critical maritime corridors due to its strategic position and vulnerability to disruption. Iran effectively controls the northern side, which allows it influence over navigation, raising concerns during conflicts or escalations, as seen in recent threats to block the strait amid tensions with Israel and the US. Historically, it has been vital for trade routes dating back centuries, facilitating the exchange of goods like ceramics, ivory, silk, and textiles. Today, its significance stems from energy security.
(Image Source: ANI)
Why this strait matters to global energy security
The strait is indispensable for global energy trade, carrying roughly 20-25% of the world's seaborne oil exports and roughly 25% of liquefied natural gas (LNG) annually. As per the US Energy Information Administration (EIA) In 2022, oil flows through it averaged 21 million barrels every day, equivalent to about 21% of global petroleum liquids consumption.
As per several reports, nearly $1.2 trillion of maritime trade passes trough the Gulf region, much of which relies on the strait of Hormuz, representing approx. 20% of global container shipments.
Key maritime route for Asian markets
This route is also vital for the Asian markets. Over 80% of the oil and LNG transported through this strategic chokepoint goes in Asian markets. Major economies such as China, India, Japan, and South Korea depend heavily on this single maritime route to meet their energy security needs.
Closure could lead to economic fallout worldwide
Given its strategic location, it has repeatedly become a flashpoint in regional tensions. Tehran has threatened multiple times to close the strait, most recently amid escalations in 2025, in retaliation to sanctions, military strikes, or other pressures. Such a closure would physically disrupt transit, blocking roughly one-fifth (about 20%) of the world's daily oil supply and a significant portion of liquefied natural gas, potentially causing severe global energy market shocks.
Energy analysts caution that even a temporary blockage could cause oil prices skyrocketing. It could fuel a global economic fallout by halting supplies to industrial powers, potential shortage world wide, spark inflationary pressure, and supply chain crises worldwide as global economy runs smoothly on stable energy prices.
The US Navy (Fifth Fleet, based in Bahrain) maintains a strong presence to ensure freedom of navigation, viewing the strait as essential to global economic health.
Alternative routes
There are very limited alternative routes to bypass the Strait of Hormuz for oil exports from Persian Gulf, mainly through pipelines. Saudi Arabia, UAE and Iran have pipelines for the oil export. These pipelines does provide some mitigation and could be rerouted in a time of disruption, but they cover only a fraction that normally passes through strait. Countries like Iraq, Kuwait, Qatar, and Bahrain have no viable pipeline alternatives, so dependent almost entirely on the strait. Additionally, there are also logistical, cost and time challenges.
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