19 min ago
What to know about the Strait of Hormuz, as Iran warns vessels to stay out

By
Hanna Ziady
Oil tankers pass through the Strait of Hormuz, on December 21, 2018.
Hamad I Mohammed/Reuters
The
Strait of Hormuz, a narrow waterway that bypasses Iran and Oman, is the main route for shipping crude from oil-rich countries such as Saudi Arabia and Kuwait to the rest of the world.
An adviser to the commander of Iran’s Islamic Revolutionary Guard Corps (IRGC) has warned that vessels passing through the Strait of Hormuz would be targeted.
Even before the adviser’s comments, traffic through the waterway had effectively stopped due to safety concerns and after oil tankers in the region came under attack over the weekend.
Iran controls the strait’s northern side. About 20 million barrels of oil, or about one-fifth of daily global production, flow through the strait every day, according to the US Energy Information Administration, which calls the channel a “critical oil chokepoint.” According to the EIA, “very few alternative options exist to move oil out of the strait if it is closed.”
The strait also carries about one-fifth of global trade in liquefied natural gas.
Energy analysts have warned that oil and natural gas prices are likely to remain elevated until the strait is passable.
Major container shipping companies, including Maersk, Hapag-Lloyd, MSC and CMA CGM, are also diverting vessels away from the waterway and the region, according to logistics firm Freightos.