Iran controls a chokepoint through which 40 percent of global oil exports passes. Which is why the U.S. will tread carefully with Iran. If they don’t, the Iran could unleash a gigantic oil Shoock. From Nick Giaumbruno at internationalman.com:
The Strait of Hormuz is a narrow strip of water that links the Persian Gulf to the rest of the world.
It’s the world’s single-most important energy corridor, and there’s no alternative route.
Five of the world’s top 10 oil-producing countries—Saudi Arabia, Iran, Iraq, United Arab Emirates, and Kuwait—border the Persian Gulf, as does Qatar, the world’s largest liquefied natural gas (LNG) exporter. The Strait of Hormuz is their only sea route to the open ocean… and world markets.
At its narrowest point, the space available for shipping lanes is just 3.2 kilometers wide.
According to the US Energy Information Administration, more than 40% of global oil exports (around 21 million barrels) transit the Strait daily.
That’s more than $1.5 billion worth of oil every day.
And that’s not considering the immense amount of LNG— about 33% of the world’s daily LNG exports—and other goods transiting the Strait.
It’s hard to overstate the importance of the Strait of Hormuz to the global economy.
