EntryUpdated 2026/08/08
Why Does the Strait of Hormuz Matter?
Because it is the only way out for Gulf crude. Around twenty million barrels of oil pass through it every day, and the overland pipelines that bypass it carry less than a third of that.
Where is the Strait of Hormuz, and how narrow is it?
The strait sits at the southeastern end of the Persian Gulf, with Iran on the northern shore and Oman’s Musandam exclave on the southern one. It connects the Gulf to the Gulf of Oman and onward to the Arabian Sea and Indian Ocean.
At its narrowest the strait is about 33 kilometres wide, and the lanes large tankers actually use are far narrower — roughly three kilometres in each direction. That scale is where everything else begins: it is not a sea but a corridor.
How much oil passes through each day?
In 2025: close to 15 million barrels a day of crude and condensate, plus nearly 5 million barrels a day of refined products. The oil comes from Saudi Arabia, Iraq, Kuwait, Qatar, the UAE, and Iran, and most of it goes to Asia.
Liquefied natural gas is even more concentrated. In 2025 roughly 93% of Qatari LNG and 96% of Emirati LNG had to transit Hormuz — together about 19% of global LNG trade, with nearly 90% of it bound for Asia.
Put differently: when this corridor narrows, the first to feel it are not Middle Eastern producers but East Asian refineries, power plants, and factories.
Can Iran actually “close” the strait?
Fully closing it would be extremely costly and would damage Iran’s own exports, so it is rarely the real option. But the question points the wrong way.
Iran does not need to close the strait to exercise power. Inspections, routing restrictions, transit charges, and ad hoc security demands are enough to raise the risk of passage. Owners, insurers, and buyers respond by raising prices or delaying sailings — and what oil markets fear most is not a single event but an incalculable next one.
That pulls Hormuz away from being a public waterway and toward a conditionally open political corridor: vessels on good terms with Tehran may be treated more leniently, others absorb higher costs. This is what gray-zone tactics look like at sea.
Is there a way around it?
Yes — but only two, and they carry crude alone.
Saudi Arabia’s East–West pipeline runs from Abqaiq across the peninsula to Yanbu on the Red Sea. It peaked at 7 million barrels a day in the first quarter of 2026, though recent loadings at Yanbu run closer to 4.7 million — nameplate capacity lives in engineering documents, while real capability depends on tank farms, berths, and vessel scheduling as a system.
The UAE’s ADCOP line runs from Habshan to Fujairah on the Gulf of Oman, about 1.8 million barrels a day, discharging outside the strait. A new line due in 2027 is set to double that bypass.
Combined bypass therefore runs near 6.5 million barrels a day against roughly 20 million transiting. And pipelines move crude only: refined products and LNG have no overland retreat, while Kuwait, Qatar, and Bahrain have no pipeline at all.
What does this mean for Taiwan?
Taiwan imports nearly all its energy, a substantial share of it from the Gulf, travelling precisely the Hormuz–Malacca–South China Sea route. Risk at the strait does not stop in the Middle East; it travels the sea lane into Taiwanese electricity prices, consumer prices, and industrial costs.
More importantly it demonstrates a structure: when a country’s critical supply has only one route, whoever guards that route acquires asymmetric bargaining power. The logic is not confined to oil — semiconductor equipment, critical minerals, and submarine cables each have their own Hormuz.
Understanding how a chokepoint works is far more useful than memorising where the strait is.