Kochi: Responding to the US striking Iran nuclear sites, Iran’s parliament has approved steps to close the Strait of Hormuz which is a strategic global oil choke point, media reports said.
The decision is pending clearance by Iran’s top security authority, the Supreme National Security Council.
Twenty per cent of daily global oil consumption passes through the Strait of Hormuz.
Blocking of the Strait of Hormuz, would disrupt trade flows, lead to increase in oil prices, destabilise the global economy, create instability in the Middle East among others.
The Strait of Hormuz is a key narrow waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea.
Besides Iran on the north coast, the other stake holders of the waterway are Oman and the United Arab Emirates on the south.
The strait serves as the sole maritime passage for oil tankers transporting crude oil from the Persian Gulf, making it one of the world’s most critical choke points for global energy security. About 20 to 30 percent of the world’s total oil consumption passes through the Strait of Hormuz.
About a third of the world’s liquefied natural gas also moves through the corridor.
Closure of the Strait of Hormuz would disrupt oil exports triggering major supply shortages and oil price increase. Any decision to close will make things difficult for Iran due to the presence of US forces in the region.
OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia. The UAE and Saudi Arabia have sought to find other routes to bypass the strait.
India gets a large part of its supply from Iran.
Closing the Hormuz will also impact Iran economically, as it would prevent Tehran from exporting its petroleum. China is the biggest buyer of Iranian oil.
