THE STRAIT OF HARMUZ: A GATEWAY TO WORLD’S TRADE AND BUSINESS

Abstract

The Strait of Hamruz, being one of the world’s most significant waterways, has gained great importance during the recent US-Israel and Iran conflict. The Strait caters for 20% to 25% of the world trade and business in terms of oil and petroleum products besides Liquefied Natural Gas. It owes its significance for its being one of the shortest sea-routes across the globe but situation took a very dramatic turn when the Strait of Harmuz was closed by Iran in the wake of recent escalation of tension in the region. Comprising eight islands with Iran being in control of seven islands, has been exercising control over the waterways since 1970s. Normally the flow of crude oil and petroleum products passing through the Strait of Harmuz on daily basis stands at 20 million barrels per day. Objective of the study aims at exploring the trade and business through the Strait of Harmuz while research questions address the issues of chokepoints, market accessibility, and use of alternative routes. Main findings of the study include huge loss to the global community as a result of the disruption of the Strait of Harmuz, heavy loss to the US economy and de facto control of Iran over the area.