Tags: Iran | Iraq | straitofhormuz | oil | tankers | navalassets

Nations Worry Iran May Try Disrupting Flow of Oil Next

Strait of Hormuz.
Strait of Hormuz. (Dreamstime)

By    |   Wednesday, 08 January 2020 05:21 PM

After Iran's retaliatory missile strikes on Iraq airbases, Middle East tension has countries sending naval assets to the Strait of Hormuz to guard against an Iranian seizure, according to the International Business Times.

"Numerous countries, including Japan and China, have sent naval assets to the Persian Gulf to protect oil shipments through the Strait of Hormuz, described by the U.S. Energy Information Administration [EIA] as 'the world's most important oil transit chokepoint,'" the IBT reported.

Iran-backed Houthi rebels in Yemen have conducted operations against tankers in the region this year, stoking fears of more aggressions amid escalated tensions including the strike killing Islamic Revolutionary Guard Corps Quds Force commander Qassem Soleimani and the ensuing Iranian missile retaliation Tuesday night.

"The most effective oil weapon — shutting the Strait of Hormuz — would damage a broad set of countries — not just the U.S. — and may make it harder for Iran to find allies in its skirmishes with the U.S.," energy analyst Stewart Glickman told Deutsche Welle. "Keep in mind though that Iran wouldn't be selling crude oil either, and it would become a pariah in the international arena since all oil-importing nations would suffer."

Countries had stood down on sending naval assets to protect their tankers, but the ships are coming back, including Britain's, The Guardian reported.

"There are limited options to bypass the Strait of Hormuz," the EIA noted, per IBT. "Only Saudi Arabia and the United Arab Emirates have pipelines that can ship crude oil outside the Persian Gulf and have the additional pipeline capacity to circumvent the Strait of Hormuz."

While the United States has become a net-exporter of oil in November, there has been some pricing fears on oil amid tensions.

"If you block the Strait of Hormuz, you will send oil through $100," Tribeca Investment Partners analyst James Eginton told CNBC.

Nearly 21 million barrels of crude oil passed through the strait daily in 2018, which amounts to 21% of the world's production, according to the report.

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After Iran's retaliatory missile strikes on Iraq airbases, Middle East tension has countries sending naval assets to the Strait of Hormuz to guard against an Iranian seizure, according to the International Business Times. "Numerous countries, including Japan and China, have...
straitofhormuz, oil, tankers, navalassets
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2020-21-08
Wednesday, 08 January 2020 05:21 PM
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