Where is the Strait of Hormuz?
The Strait of Hormuz is a narrow waterway connecting the Arabian Gulf with the Gulf of Oman, and from there the Arabian Sea and the Indian Ocean. It lies between Oman's Musandam Governorate to the south and Iran to the north, and is the only sea route from the Gulf states to the open ocean.
Why does it matter?
The strait matters because a large share of the world's oil and gas exports passes through it. The Gulf states are among the largest energy producers and exporters, and most of their seaborne exports have no other way out. Energy agencies such as the US Energy Information Administration estimate that around a fifth of global oil consumption passes through the strait, along with large volumes of liquefied natural gas.
How do ships pass through?
Because the strait is narrow, ships follow a traffic separation scheme: one lane for vessels entering the Gulf and another for those leaving, with a buffer zone between them. Passage is governed by the international law of the sea, which guarantees transit through straits used for international navigation.
The link with oil prices
Energy markets react quickly to any news about the strait. Military tension, threats to close it or attacks on tankers raise oil prices and marine insurance costs, because traders price in the chance of disrupted supply. That is why investors and shipping companies follow the region closely.
Are there alternatives?
Some Gulf states have tried to reduce their dependence on the strait through pipelines to ports outside it:
- Saudi pipelines carrying oil to Red Sea ports.
- A UAE pipeline carrying oil to the port of Fujairah on the Gulf of Oman.
But these alternatives cannot carry everything that passes through the strait, so Hormuz remains indispensable.
Oman's role
With Musandam on the strait's southern shore, Oman has traditionally been keen on maritime security there, and its foreign policy is known for promoting dialogue and de-escalation in the region, which serves everyone's interest in keeping this vital passage open and safe.
Conclusion
When you read news about the Strait of Hormuz, remember that what happens in this narrow passage does not stay local: it can affect fuel prices at stations thousands of kilometres from the Gulf.
