Understanding the Strait of Hormuz: The World Energy Backbone in the Shadow of the Iran War

YOGYAKARTA - The Strait of Hormuz is a narrow waterway in the Persian Gulf region that is used by tankers carrying about a fifth of the world's oil supplies. The escalating Iran war is hindering the tanker traffic, which has caused world oil prices to soar sharply. So, what happens in the Strait of Hormuz can have an impact on your household kitchen. The following will discuss some things you need to know about the Strait of Hormuz, the Iran war, and its impact on global energy stability.

As reported by AP News, the Strait of Hormuz is a narrow, winding sea lane that is the main exit and entry point for tankers supplying the world's energy. The narrowest point has a width of only about 33 kilometers. This strait connects the Persian Gulf to the Gulf of Oman before the ships sail to the open ocean.

To the north of the strait stands Iran with its long coastline, while on the south side is Oman. Although the two countries have territorial waters there, the Strait of Hormuz is legally seen as an international route that ships from various countries can pass through.

Giant ships carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE, to Iran itself. Most of the energy flows into Asian markets that are highly dependent on supplies from the Gulf region. This dependence is what makes every disruption in the Strait of Hormuz immediately felt in the international market.

The Strait of Hormuz has long been an important route for world trade. For centuries, this route has been part of an ancient trade route connecting East and West. Ceramics, silk, textiles, to spices used to pass through these waters before being replaced by tankers.

Although there are alternative pipelines in Saudi Arabia and the UAE that could reduce dependence on this strait. However, according to various international energy analyses, most of the oil volumes passing through do not have adequate alternative routes. This means that if the Strait of Hormuz is disrupted, the world does not have many options to maintain the smooth flow of global energy supplies.

Threats to the strait always have a direct impact on global energy prices. In the latest tensions of the Iran war, ship satellite navigation systems were reportedly disrupted and several ships were targeted. Although it has not officially closed, tanker traffic has dropped sharply due to the sharp increase in security risks.

Several global shipping companies have even suspended operations in the region. Major companies such as Maersk and other operators choose to hold their ships until the situation stabilizes. Without security guarantees, shipping through this strait is a big gamble.

The latest data shows dozens of fully loaded tankers are being held in the Gulf region, while dozens more are waiting outside the strait waters. When the flow of energy is stalled, its dominant effect spreads throughout the global supply chain. Imagine if the disruption lasts a full month, it is not impossible that oil prices will penetrate three digits and the European gas market will return to near crisis levels like in 2022.

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