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The Strait of Hormuz’s Geopolitical Significance Research Paper

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Updated: Jun 15th, 2020

The Strait of Hormuz is considered to be the most important bottleneck in international navigation. Geographically, the Hormuz strait is a narrow waterway located between the Persian Gulf and the Gulf of Oman. This waterway has Iran to its North coast and the United Arab Emirates on its South coast. The significance of the Hormuz strait grew during the 20th century following the discovery of huge oil reserves in the Middle East. To date, its importance continues to be because it serves as the key transportation route for petroleum products from the oil-rich nations in this region (Wright, 2012). It is estimated that about one-fifth of global oil consumption passes through this region each day.

The economic significance of the Strait of Hormuz to the Persian Gulf is great. A number of oil-rich Middle East countries depend on it as an export route. Jacobs (2014) states that the Strait is the sole export route for Iran, Kuwait, Bahrain and Qatar. It also serves as a primary route for Saudi Arabia and Iraq. This strait serves as passage for about 90% of the Persian Gulf’s oil exports and all of its liquefied natural gas exports. The oil-dependent Middle East countries therefore rely on this waterway for their continued economic prosperity.

The Strait is also important to the global economy, which is largely driven by energy from fossil fuels. Since about 20% of global oil passes through this location, it is crucial to the global economy. Jacobs (2014) reports that any disruption in the Strait of Hormuz would result in the sustained loss of millions of oil barrels per day leading to major oil shock. The significance of the strait to the oil market can be seen from the fact that oil prices rose by 2% following Iranian threats in 2012 to disrupt the Strait of Hormuz (Jacobs, 2014). The Straight therefore has a direct impact on the economic wellbeing of an oil-reliant world.

The Strait of Hormuz also has military significance especially to Iran. Since the overthrow of the Shah through the 1979 Revolution, Iran has had a bad relationship with the US. Under the Shah, Iran had enjoyed a close relationship with the US. However, the ousting of the Shah led to a rise in hostility between the two countries. Since 1979, Iran lives in fear of military attacks from the US and Israel. To increase its military capabilities, Iran uses the Strait as a strategic military tool (Stratfor Analysis, 2012). Iran’s advantage comes from the fact that oil tankers must pass through its territorial waters when using the Strait of Hormuz. To deter an attack against the country by Israel or the US, the Iranian military has threatened to close the Strait of Hormuz. Iran is aware of the significance of the Strait to the international community and therefore uses it as a means of deterrence. Wright (2012) documents that the US is keen to ensure that the strait remains open. To achieve this, the US is not wiling to engage Iran in an unnecessary military confrontation.

The Strait of Hormuz is a vital waterway to the Middle East region and the global community. From this paper, it is clear that this location has major influence on the global and regional economy. In addition to this, the waterway provides military advantages for the Iranian government. Until a feasible alternative for transporting petroleum products from this region is developed, the Hormuz Straits will remain to be the most important bottleneck in international navigation.

References

Jacobs, J. (2014). Asia vulnerable to oil shock. Petroleum Economist, 81(6), 1-2.

Stratfor Analysis (2012). Iran’s Deterrence Strategy in the Strait of Hormuz. Washington: Stratfor Analysis.

Wright, D. (2012). What If? Iran Closes Hormuz. Emerging Markets Monitor, 17(39), 1-17.

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IvyPanda. "The Strait of Hormuz's Geopolitical Significance." June 15, 2020. https://ivypanda.com/essays/the-strait-of-hormuzs-geopolitical-significance/.

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IvyPanda. 2020. "The Strait of Hormuz's Geopolitical Significance." June 15, 2020. https://ivypanda.com/essays/the-strait-of-hormuzs-geopolitical-significance/.

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IvyPanda. (2020) 'The Strait of Hormuz's Geopolitical Significance'. 15 June.

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