Key Trade Route Strait Of Hormuz Under Market Watch After Israeli Attacks On Iran
LONDON, June 13 (Bernama-Anadolu) -- Global markets are closely monitoring the Strait of Hormuz, a vital corridor for oil and liquefied natural gas (LNG), amid fears that a widening conflict between Israel and Iran could disrupt traffic through the narrow waterway.
The Strait of Hormuz, positioned in between the Persian Gulf and the Gulf of Oman, is a narrow but critical sea route that approximately one-third of global oil trade, accounting for 17 million to 20 million barrels of crude oil and condensate passes through daily, according to Anadolu Ajansi.
Around 70 per cent of oil volume goes to Asia via this route, with China, Japan, India, South Korea, Singapore, Thailand, Pakistan, and the Philippines among the largest recipients, according to the International Energy Agency.
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The route is also essential for LNG exports, especially from Qatar and the United Arab Emirates, which account for 20 per cent of global LNG trade. Europe is a key destination for LNG that transits through Hormuz.
While Iran has previously threatened to close the strait in response to geopolitical tensions, it has yet to act on such threats.
However, the prospect of a broader regional conflict following Israel's airstrikes on Iran has renewed concerns over possible supply disruptions and rising energy prices.
The UK Maritime Trade Organisation said on Wednesday that the rising tensions in the region could escalate the military activity in critical waterways and affect maritime transport, while the Baltic and International Maritime Council also warned that any attack could directly impact maritime transport.
Some analysts say that Iran has a lot at stake should they close the route, as almost all the country's oil exports and a large portion of China's oil imports comes through the Strait of Hormuz.
Anadolu reported Arne Lohmann Rasmussen, chief analyst and head of research at Global Risk Management, said that the closure of the Strait of Hormuz would be an 'absolute nightmare' for the oil market.
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