Saudi Arabia · Strait of Hormuz · Iran · Fortune Technology
The threat of shortages pushed countries across Asia to impose export bans, cut import duties
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Six months since the onset of the war, doomsday scenarios —price spikes, long lines at gas stations, power outages, and grounded flights—haven’t come to fruition, as increased production and hefty stockpiles blunted some of the damage.
Key facts
- While oil prices did surge to as high as $126 per barrel, they didn’t hit the $150 to $200 a barrel level that some analysts feared
- Before the war, the Middle East accounted for 90% of Japan’s crude oil imports, and roughly 11% of its liquefied natural gas
- The Iran war exposed how much the world relied on a narrow 20-mile-wide waterway
- If all these additional investments pan out, only 10% of the world’s oil will need to travel through the Strait of Hormuz, down from 20% before the war
Summary
The Iran war exposed how much the world relied on a narrow 20-mile-wide waterway. It seems that normality, in some form, could be returning to the Strait. Yet the revelation of how easy it was for Iran to block, and continue blocking, one of the world’s most important waterways is pushing governments to diversify their sources of energy. And now, with the prospect of a U.S.-Iran deal in the near-term on life support and Iranian control of Hormuz now looking secure for years to come, what previously saved the global oil market in the first half of the year might not work for a second time.