Poder360 video explains the importance of maritime passage and which countries are most affected by the blockade
As a strategy to put pressure on the global economy, Iran blocked the Strait of Hormuz – a 33 km wide maritime route in the Middle East – after the start of the war with the United States and Israel in . The Islamic republic wants to force other countries to demand an end to US attacks, as the blockade affects the transport of more than 14 million barrels of oil per day.
The volume corresponds to 25% of the global flow of commodity. In Brazil, Petrobras states that “has alternative routes to the conflict region” and that this will not affect the country abruptly, because import flows are “mostly outside the crisis region”.
The president of Petrobras, Magda Chambriard, said on March 6 that the company will try to avoid the immediate passing on of fluctuations in the price of oil on the international market to Brazilian consumers. According to her, the strategy is to reduce the effects of volatility on fuels in the country.
The increase in oil prices can directly and indirectly affect other sectors of the global economy, mainly in Asia. Here are the main items at risk of price variation:
- fuels (oil and natural gas);
- power generation;
- food;
- chemicals and plastics.
Watch the video (2min17s):
East Asia and India
China faces the biggest impact in absolute terms because it leads global oil imports. The country receives 38% of all barrels transported through the route, with the volume exceeding 5 million barrels per day.
Barrels shipped through the Strait of Hormuz represent about half of all Chinese oil imports. The country maintains alternative oil pipelines with Russia and Central Asian countries, but dependence on oil from the Middle East is still strong.
In the case of Japan, dependence on the sea route is more pronounced. Approximately 70% of Japan’s oil imports pass through the narrow strip of water in the Middle East. Prime Minister Sanae Takaichi (PLD, right) on March 2 that the country had enough reserves to last approximately 250 days.
India also suffers severe consequences from the closure of the crossing. Of the daily imports of 5 million barrels, around 2.1 million transit through the strait. The blockade poses a threat of almost complete strangulation to Indian industry.
Middle East
Middle Eastern oil producers themselves are facing economic difficulties due to the blockade.
Only Saudi Arabia, the United Arab Emirates and Iraq have the infrastructure to bypass the obstruction and transport their production. Kuwait and Qatar, for example, do not have alternative routes for transporting their production. Countries will face even more serious problems if the total blockade of the strait continues, as is the case under Iran’s new supreme leader, .
