The Strait of Hormuz, a narrow 30-mile-long maritime passage nestled between the Persian Gulf and the Gulf of Oman, is one of the most critical arteries of global trade, especially in energy. Every day, an average of 114 to 122 ships navigate through this vital corridor, carrying goods and, more significantly, the lifeblood of the global economy: oil and gas.
A Geopolitical Chokepoint
Roughly 80% of global trade is conducted by sea, and the Strait of Hormuz plays an outsized role in this equation. About 20% of the world’s oil and gas shipments, equivalent to around 15% of global energy reserves, pass through the strait. It connects the world to the top oil and gas-producing nations: Bahrain, Iran, Kuwait, Oman, Qatar, Saudi Arabia, Iraq, and the UAE. Together, these nations control 50% of global oil and 40% of natural gas reserves, with Saudi Arabia and Qatar at the forefront in oil and gas production, respectively.
Iran exerts considerable influence over this strategic passage. Of the eight highlands guarding the strait, seven are under Iranian control. Although the UAE once sought to manage three of them, Iran has maintained de facto authority since 1970. This geographic leverage gives Iran not just regional dominance but also global significance.
The East Asian Dependence
The vast majority, 76% of the energy exported through the Strait of Hormuz is destined for East Asia. China, the world’s second-largest economy, depends on this passage for 45% of its oil imports. Japan, almost entirely dependent on imported energy, sources 80% of its oil from the Persian Gulf. India and South Korea, ranked sixth and tenth in global economic size respectively, rely on the region for 70% of their oil and significant portions of their gas needs.
Why the U.S. Won’t Risk a War
Given these dynamics, the United States has long maintained a strong military presence in the region, aiming to ensure the security and stability of the strait. The reason is simple: any disruption, particularly if Iran were to block the passage, could trigger a global energy crisis. Oil prices would skyrocket, inflation would surge worldwide, and the fragile balance of economic stability could tip into chaos. In the worst-case scenario, such disruption could even escalate into a global conflict.
That’s a risk the U.S. and indeed the world cannot afford. Especially at a time when the global economy is still recovering from recent disruptions, maintaining peace in this critical region is not just strategic diplomacy; it’s economic necessity.
By Mohiuddin Rubel
Former Director, Brand BGMEA
Managing Director, Bangladesh Apparel Exchange
Additional Managing Director, Denim Expert Ltd
