Summary
For over two weeks, the Strait of Hormuz has seen disrupted traffic due to several vessel attacks. This strait is important because it carries about 20% of the world’s petroleum and significant amounts of liquefied natural gas (LNG). The closure is affecting global energy markets, causing oil and gas prices to rise sharply.
Key Facts
- The Strait of Hormuz is a key passage for transporting oil and natural gas globally.
- About 20% of the world's petroleum and nearly a fifth of its LNG pass through the strait.
- Iran’s actions have resulted in several ships being attacked or stuck.
- Major companies like Qatar Energy and Shell declared force majeure, which is rare for the region.
- Iraq reduced its oil production significantly due to transit challenges.
- Oil prices have surged to approximately $120 per barrel.
- The disruption has also severely impacted LNG production, causing price spikes globally.
- The United Nations Convention on the Law of the Sea outlines the right of transit through such international straits, suggesting possible legal issues with the closure.
