Why the Strait of Hormuz is so important, in just 10 minutes
SUMMARY
There's a single waterway in the world that pops up in the news every year or so and, right now, is popping up every week or more: The Strait of Hormuz. When I was deployed with Army Central, we received a brief from senior leaders that was all about the importance of this single strip of water. If you're still a little fuzzy on how Iran can pressure the rest of the world through such a small bit of water, here's a great primer.
The video above is from Vox. We're going to highlight some details below, but you can understand the broad strokes just by watching that for 9.5 minutes.
The most important thing to understand is that one of the things that makes the strait so important is how small it is. There simply isn't another economical way to ship most of the oil out of the gulf region, and the strait is so small that even a small navy like Iran's can inflict serious pain.
It's sort of like the "Hot Gates" from the story of the Spartans at Thermopylae. But America is Xerxes and Iran gets to play King Leonidas.
A map shows the network of oil pipelines that carries gas and oil from Russia to the rest of Europe.
(Samuel Bailey, CC BY 3.0)
And oil is, even more than most other commodities, a resource that is extremely price sensitive and the markets are so fluid (no pun intended) that reducing supply anywhere increases price everywhere. Oil coming through the strait is destined for markets around the world, especially the Pacific and Europe.
So, take Europe for a moment. Now, it can get oil from a lot of places. Rigs in the North Sea provide plenty of energy, and pipelines from Russia pump fuel as far west as Germany, Italy, and even England. But all of those markets count on the Russian oil, the North Sea oil, and oil from the Strait of Hormuz. If the oil from the gulf is threatened in the strait, then buyers start competing harder for Russian and North Sea oil and that drives up prices quickly.
And that drives up the price of everything. Petroleum drives cars, heating oil warms homes, lubricants are needed for everything from vehicles to ice cream makers to door hinges. An interruption of oil in the strait threatens 20 percent of the world's oil supply, making everything more expensive and risking thousands of homes going cold.
But why is Iran willing to do this? After all, they are risking a new war by attacking tankers flagged by gulf and European countries.
Well, Iran needs sanctions relief, and right now that's primarily a problem between them and the U.S. Sure, Europe has a longer trading relationship with Iran, and it has protested losing access to Iranian markets and oil during periods of American-led sanctions. But Europe has proven time and again that in a power struggle between the U.S. and Iran, Europe is willing to step aside.
Targeting oil in the strait allows Iran to spread the pain to other countries. Europe is forced off the sidelines as its access to energy markets is thrown into disarray. China, India, Japan, and South Korea are all top-five oil importers, and America—at number two—is the final member of the big 5. All of them feel the crunch when oil prices climb.
But there's, obviously, a big risk for Iran. While China and Russia might side with Iran if only to counter American power, the rest of the world could easily decide that it's easier to back the U.S. in a power play against Iran than to endure Iranian agitation.
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