After attacks by the United States and Israel against Iran last Saturday (28), the Strait of Hormuz was closed for security. The measure generates panic in the markets, as the route is the main oil flow channel in the world, essential for countries in Asia, Europe and the Americas.
What is the Strait of Hormuz and where is it?
It is a narrow sea channel that connects the Persian Gulf to the Gulf of Oman, separating Iran from the Arabian Peninsula. Despite being only 33 km long at its tightest point, it is considered the most important artery in the global energy market due to its strategic location.
What is the economic importance of this route?
Around 20 million barrels of oil pass through there every day, which represents a fifth of all world consumption. In addition to fuel, the strait is vital for transporting liquefied natural gas and other essential products such as fertilizers, electronics and automobiles.
Who are the main people affected by the closure of the channel?
The biggest losers are countries in the Asia-Pacific region, such as China, India, Japan and South Korea, which receive 82% of the oil transported there. Furthermore, Gulf countries such as Saudi Arabia and Kuwait depend on this route to guarantee their revenues and fiscal stability.
What were the immediate impacts of the current outage?
The flow of oil imports through the route fell by around 75% shortly after the closure was announced. In the financial market, the price of a Brent barrel rose by 10% at the opening of business this Monday (02), reflecting the fear of global shortages.
How can this blockade affect the consumer’s pocket?
The prolonged interruption causes a chain reaction: more expensive oil increases freight and industrial production costs. This cost ends up being passed on to the end consumer, generating global inflation and making everything from gasoline to food and electronic products more expensive.
Content produced based on information gathered by the Gazeta do Povo team of reporters. To access the full information and delve deeper into the topic, read the report below.
SEE ALSO:
- Strait of Hormuz: what it is and why blocking the route threatens the world economy
