July 25, 2008
Oil chokepoints

Last month, the commander of Iran’s Revolutionary Guard declared that if Iran was attacked, Iran would "definitely act to impose control on the Persian Gulf and Strait of Hormuz". The Strait of Hormuz is a 21-mile-wide gap that provides the only exit for a constant stream of supertankers to and from the Persian Gulf into the open ocean, representing 17% of world oil supply.

But Hormuz is not the only chokepoint in global oil flows. More than half of the world’s daily oil production moves through channels or pipelines that could be easily ambushed. If a single threat against one of these chokepoints, even from the leader of a mediocre fighting force, can send jitters through the market, we shudder to think what a coordinated attack on multiple targets could do.

Oil prices have retraced their steps in the last few days, but the situation remains precarious, with no obvious remedy to lessen the world’s dependence on these vulnerable transport corridors.

 

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