Strait of Hormuz

Persian Gulf

Strait of Hormuz

The Strait of Hormuz, between Iran and Oman is the narrow (roughly 30 miles wide) sole entrance and exit to the Persian Gulf from which approximately 20% of the world’s oil is shipped to the industrialized world. As you can see on the maps above, it is a narrow dogleg to the east and south and contains numerous islands. Iran is threatening to close the Strait in response to the US and Western embargo which is being used to hurt the Iranian economy and purports to persuade Iran not to pursue nuclear weapons.

Oil prices

Even the threat of an interruption in oil shipments will be sufficient to drive up prices because insurance for the ships transiting the Strait will increase. If by accident or design, hostilities breakout in the area, insurance rates will skyrocket and some or many ship-owners will refuse to endanger their ships. The US military should be able to keep the Strait open for military shipping, but commercial shipping will be severely disrupted. Remember that 20% of the world’s oil passes through the Strait and the gas shortage that caused panic buying in the US was only a 4% decrease from the year before.

1979 shortage

For those who don’t remember 1979 or were too young to drive, permit me to refresh memories. Motorists could not be sure that gas would be available, so most motorists tried to keep their gas tanks as full as possible. This led to long lines at the gas stations that had fuel for sale. Fights often broke out as some motorists tried to jump ahead in line. I witnessed one altercation myself when another driver cut in line in front of me. I did not want to start a fight, but other drivers around me did.

Results

Finally, some states introduced systems to reduce panic buying. In California, license plates ending in even numbers could only purchase gas on even numbered days, and odd numbered plates on odd days of the month. Personalized and other plates were assigned to be either even or odd. When gas stations had sold out, they closed for the day. It was odd to drive past dark gas stations when in the past they had been brightly lighted 24 hours per day.

The future

Gas prices spiked and the 55 mile per hour speed limit remained in effect from 1973 to 1995. All this from only a 4% decline in gas availability. Just think what a larger decrease could mean now on the price of gas and our fragile economy. Iran could easily disrupt shipping in the Strait of Hormuz by sowing mines and by the use of swarms of small, speedy boats to attack oil tankers and our fleet. The Persian Gulf is not a safe place for our navy.

Please see Regime change

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