US-Iran tensions threaten the world’s most important oil-shipping route

THE STRAIT of Hormuz, a narrow stretch of water connecting the Persian Gulf to the rest of the world’s oceans, has long been recognised as the most important choke-point for global oil supplies. Accounting for about a third of the world’s sea-borne oil (and a fifth of the world’s total oil exports), the strait links oil and gas producers in the Middle East with consumers around the globe, including those in Europe, Asia and America. In 2016, according to America’s Energy Information Administration, the waterway carried some 19m barrels of crude and other petroleum products a day. Were it to be blocked, the world’s supply of oil would fall, and prices would spike.

The risk of such an event is growing, and oil prices are rising as a result. In May last year, President Donald Trump pulled out of a nuclear deal with Iran and reimposed crippling sanctions on the country. Hassan Rouhani, Iran’s president, responded by threatening to block oil shipments; if Iran could not export oil, nor could others. Tensions have escalated further in recent days. On June 13th two ships were attacked in the Gulf of Oman. On June 20th an American surveillance drone flying over the strait was shot down by Iran’s Islamic Revolutionary Guard Corps. After tweeting that “Iran made a very big mistake!”, Mr Trump reportedly ordered military strikes on Iran—only to change his mind hours later.