+923218400111
ROOM NO 214, 2ND FLOOR, LSE PLAZA, 19-KHYABAN-E-AIWAN-E-IQBAL, LAHORE
accounts@bspl.com.pk

Are you ready to change the game? Find Out More

Strait of Hormuz: Why it matters to global oil trade?
Home » BUISNESS  »  Strait of Hormuz: Why it matters to global oil trade?

A tug boat moves cargo towards the Strait of Hormuz, in Musandam province, Oman. — Reuters/File
A tug boat moves cargo towards the Strait of Hormuz, in Musandam province, Oman. — Reuters/File

Iran's top security body — Supreme National Security Council — must make the final decision on whether to close the Strait of Hormuz, Iranian TV said on Sunday, after parliament reportedly backed the measure in response to US strikes on several of Tehran's nuclear sites.

Iran has in the past threatened to close the strait but has never followed through on the move, which would restrict trade and impact global oil prices.

Below are details about the strait:

What is the Strait of Hormuz?

The strait lies between Oman and Iran and links the Gulf north of it with the Gulf of Oman to the south and the Arabian Sea beyond.

It is 21 miles (33 km) wide at its narrowest point, with the shipping lane just 2 miles (3 km) wide in either direction.

Why does it matter?

About a fifth of the world's total oil consumption passes through the strait. Between the start of 2022 and last month, somewhere between 17.8 million and 20.8 million barrels of crude, condensate and fuels flowed through the strait daily, data from analytics firm Vortexa showed.

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia. The UAE and Saudi Arabia have sought to find other routes to bypass the strait.

Strait of Hormuz: Why it matters to global oil trade?

About 2.6 million barrels per day (bpd) of unused capacity from existing UAE and Saudi pipelines could be available to bypass Hormuz, the US Energy Information Administration said in June last year.

Qatar, among the world's biggest liquefied natural gas exporters, sends almost all of its LNG through the strait.

The US Fifth Fleet, based in Bahrain, is tasked with protecting commercial shipping in the area.

History of tensions

In 1973, Arab producers led by Saudi Arabia slapped an oil embargo on Western supporters of Israel in its war with Egypt.

While Western countries were the main buyers of crude produced by the Arab countries at the time, nowadays Asia is the main buyer of OPEC's crude.

The US more than doubled its oil liquids production in the last two decades and has turned from the world's biggest oil importer into one of the top exporters.

During the 1980-1988 Iran-Iraq War, the two sides sought to disrupt each other's exports in what was called the Tanker War.

In July 1988, a US warship shot down an Iranian airliner, killing all 290 aboard, in what Washington said was an accident and Tehran said was a deliberate attack.

In January 2012, Iran threatened to block the strait in retaliation for US and European sanctions. In May 2019, four vessels - including two Saudi oil tankers - were attacked off the UAE coast, outside the Strait of Hormuz.

Three vessels, two in 2023 and one in 2024, were seized by Iran near or in the Strait of Hormuz. Some of the seizures followed US seizures of tankers related to Iran.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Public Notice

Beware of Fraudulent Schemes Misusing the Name of Bridge Securities Pvt. Ltd

Fraudulent individuals and entities may misuse the identity of Bridge Securities Pvt. Ltd or falsely impersonate its directors or executives to deceive the public through unauthorized communication channels, fake profiles, and misleading information.

We strongly advise our clients and the general public to exercise caution and remain vigilant against such scams.

Please note:

  • Bridge Securities Pvt. Ltd has no affiliation with any unofficial pages, profiles, apps, or WhatsApp numbers.
  • We never request OTPs, personal information, funds, or investments through unofficial platforms.
  • All communication from Bridge Securities Pvt. Ltd is conducted only through our official phone numbers, website, email, social media handles through official representatives.

For your safety:

  • Always verify the authenticity of any communication before engaging.
  • Make sure that you are dealing with licensed entities and registered professionals by conducting research from the PSX and SECP websites.
  • Regularly visit SECP, PSX, CDC, and NCCPL websites for authentic updates.
  • Transact only through official banking channels linked to licensed brokers.
  • In case of any ambiguity it is recommended to contact and verify the information through our official representatives.

Official Channels:

  • Website: www.bspl.com.pk
  • Email: accounts@bspl.com.pk
  • Social Media: Not Available
  • Helpline: 0321-8400111

Shareholder Agahi – Your Gateway to Shareholder Insights

Pakistan’s first comprehensive platform, developed by PICG and CDC, dedicated to enhancing shareholder awareness and empowerment.

Discover Shareholder Agahi- Your one-stop hub for real-time shareholder updates, rights, and governance insights. Empower yourself with accurate information.Explore the portal: https://www.shareholderagahi.com/ Watch the tutorial (Urdu): https://www.youtube.com/watch?v=O7iCRiKJ37A

This will close in 20 seconds