3 months ago
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Topline
Oil tankers are avoiding the Strait of Hormuz—a strategic Middle Eastern shipping route often used for exporting oil—following U.S. and Israeli strikes in Iran Saturday and Iran’s retaliatory strikes in nearby countries, according to Bloomberg.
The Strait of Hormuz, a key shipping route for oil, was reportedly closed Saturday after Iran was hit by airstrikes.
AFP via Getty Images
Key Facts
The United Kingdom Maritime Trade Operations said Saturday it was aware of “significant military activity in the strait” and received reports from vessels citing broadcasts that claimed the strait was closed, but added it was unable to verify those reports.
The Wall Street Journal reported “dozens” of tankers had diverted from the strait, including multiple supertankers chartered by Shell.
While some oil tankers U-turned at the strait as a precaution, some small tankers and “several bulk carriers” continued to cross it Saturday, according to Bloomberg’s Javier Blas, who was monitoring activity on the waterway.
OPEC+, a powerful alliance of countries that produce oil, will meet Sunday and may consider increasing oil output from 137,000 barrels per day to 411,000 amid fears of supply distribution, according to Reuters.
Oil transit through the Strait of Hormuz has previously been disrupted through periods of heightened tensions involving Iran, including tanker attacks and vessel seizures in 2019.
Key Background
The Strait of Hormuz is widely considered one of the world’s most strategic energy chokepoints, linking the Persian Gulf to other shipping lanes through the Gulf of Oman and Arabian Sea. The U.S. Energy Information Administration said 20% of the world’s oil consumption passes through the waterway daily, with 20.9 million barrels transported daily. It’s relied on as a route to ship oil and gas to North America, Europe and Asia, but it’s too early to know the long-term effects a possible shutdown of the strait may have.
Crucial Quote
“Large volumes of oil flow through the strait, and very few alternative options exist to move oil out of the strait if it is closed,” the EIA previously said.
English (US) ·