Firstly, global oil supply will ride in coming weeks understandably after a US strike in Baghdad killed Qasem Soleimani, a top Iranian general.Tehran, furious and determined to retaliate, might focus on the Strait of Hormuz, off Iran’s southern coast.The channel, which is only 21 miles wide at its narrowest point, is the only way to move oil from the Persian Gulf to other parts of the world.
Last year, an attack on two vessels— one carrying oil and the other transporting a cargo of chemicals infuriated Washington. The two ships were allegedly attacked by Iran according to the US in the nearby Gulf of Oman which caused a slight surge in oil prices.
Iran’s response to the killing of Soleimani is likely to include attempts to disrupt shipping in the Persian Gulf says Eurasia analysts, “Iran will also likely resume harassment of commercial shipping in the Gulf and may launch military exercises to temporarily disrupt shipping,” the analysts said in a research note.
If the Strait of Hormuz were to be closed because of the threat of ongoing attacks, it would be a huge blow to the world’s economy.The Strait of Hormuz, which links the Gulf of Oman and the Persian Gulf, “is the world’s most important choke point,” according to the US Energy Information Administration. The shipping channels in the passage that can handle supertankers are only two miles wide heading in and out of the Gulf, forcing ships to pass through Iranian and Omani territorial waters.The amount of oil that passes through the channel is staggering, with roughly 80% of the crude it handles destined for Asia. The global economy could not function without those supplies.
Oil prices surge after tanker attack in Gulf of Oman 01:25. About 22.5 million barrels of oil a day passed through the Strait of Hormuz on average between the start of 2018 and June last year, according to energy analytics firm Vortexa.
Meanwhile, Trump has stated that his actions to eliminate the Iranian General was not to start a war but to prevent a war. Cheers as well as criticisms continue to trail his decision. Many are sceptical of the US ability to face the consequences.