Why Iran Closing the Strait of Hormuz is a Big Deal

Why Iran Closing the Strait of Hormuz is a Big Deal

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia

The Iranian media reported that the Strait of Hormuz is closed and Iran will fire on any ship trying to pass.

About a fifth of the world's total oil consumption passes through the strait.

The Strait of Hormuz lies between Oman and Iran. It 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.

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia.

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

Oil shipments disrupted as four tankers hit

Insurance companies are canceling war risk coverage for vessels in the Gulf as the widening Iran conflict disrupted shipping.

The conflict has left at least four tankers damaged, two seafarers killed and 150 ships stranded around the Strait of Hormuz.

Vessels in the area were hit as Iran retaliated to U.S. and Israeli strikes.

The strait between Iran and Oman carries around one-fifth of oil consumed globally as well as large quantities of gas.

( Source : Reuters )

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