The Strait of Hormuz (26°34'0.00"N,  56°15'0.00"E) a narrow passageway connecting the Persian Gulf with the Arabian Sea and separating Iran from the Arabian Peninsula, is one of the world's vital oil transit chokepoints.

Source: Wikimedia Commons
 

The northern tip of the United Arab Emirates (UAE) forms the southern shoreline of the strait. The UAE, officially created in 1971, is a constitutional federation made up of Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quaiwain, Ras al-Khaimah and Fujairah. The narrow strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait consists of 2-mile wide channels for inbound and outbound tanker traffic, as well as a 2-mile wide buffer zone.

Why is this Region Important?

Two-thirds of the world's oil is transported by ocean; straits and canals are therefore vital in reducing the time and costs of transporting oil, as well as other goods, globally. Any political disturbances or upheavals can cause the “choking” of the few important straits for world oil transit and thus disrupt world oil prices.

The abundance of oil and the world’s dependence on imported oil from this region make the Strait of Hormuz one of the most important chokepoints to monitor. The strait has a width of 54 km (34 miles) and is consequently a relatively easy passageway to obstruct. Roughly 17 million billion barrels per day (bbl/d) or 40% of world’s oil passes through this strait daily.

The UAE and Iran, along with the rest of the Persian Gulf countries (Bahrain, Iraq, Kuwait, Qatar, and Saudi Arabia), produced 27% of the world’s oil in 2003 and collectively hold more than half of the world’s total oil reserves, as reported by the Energy Information Administration (EIA). Organization for Economic Co-operation and Development (OECD) countries import the majority of their oil from the Persian Gulf; in 2003, 11.6 million barrels per day were exported to OECD countries. The majority of oil leaving this region passes through the Strait of Hormuz.

Source: NASA
 

Threats to Disrupt Passage through the Strait

Fortunately, the strait has never actually been shut down, yet the constant political, religious, ethnic, and territorial disputes between the Persian Gulf countries has made the world anxious in anticipation of obstruction.

On September 22, 1980, Iraq invaded Iran, initiating an eight-year war between the two countries. The Iran-Iraq war was the manifestation of deeply rooted religious and ethnic divisions, border conflicts, and political differences. Religious and ethnic divides between the Sunnis and the Shias, coupled with personal hostility between Saddam Hussein and Ayatollah Khomeini, then-leaders of Iraq and Iran respectively, added to the tension.

In 1984, Iran threatened to close the Strait of Hormuz after repeated attacks by Iraq disrupted Iranian shipping. However, in order to continue exporting oil and maintain its economy, Iran needed to keep the strait open and ultimately backed down from this threat.

Another threat to the Strait of Hormuz involves the ongoing dispute between the UAE and Iran over three islands – Abu Musa, Greater Tunb Island, and Lesser Tunb Island – all located near the Strait of Hormuz. The island Abu Musa is of particular interest because it is thought to contain large deposits of oil. By 1992, Iran managed to informally secure the islands even though no official agreement had been made with the UAE.

The Gulf Cooperation Council and the UAE are reluctant to interfere for fear that Iran will retaliate by closing the strait. Claims to the islands are still being disputed, yet Iran has asserted dominance by developing military stations on these islands, particularly guarding Abu Musa. Such development on these strategic islands will only facilitate Iran’s capability to close off the straits and defend itself against US military attacks.

In 1997, Iran once again threatened to close the strait if the United States attempted to interfere with Iranian terrorism against other Persian Gulf countries.

Although Iran has yet to follow through on its threats to close the strait, if it were to happen, alternative routes would need to be utilized. This could add to transportation costs and forestall the global distribution of oil, causing oil prices to increase.

Petroleum is the single most important commodity in today’s world. Our dependence on this resource can be felt in the way society reacts to even minor shifts in oil markets. With demand and consumption increasing, mankind’s dependence on oil only continues to grow. Our dependence is such, that any minor interference in the production or distribution of oil has profound economic and political consequences. Because oil being exported through the Strait of Hormuz is projected to increase, ensuring the flow of oil through this hostile region will continue to be a crucial issue in the years to come.

Further reading
[1] Rodrique, Jean-Paul. “Straits, Passages and Chokepoints: A Maritime Geostrategy of Petroleum Distribution.” Les Cahiers de Geographie du Quebec, Vol. 48, No. 135, 357-374.
[2] Persian Gulf Oil and Gas Exports Fact Sheet
[3] The United States and the Iran-Iraq War
[4] Island Dispute Between Iran and the UAE