Not long after a round of skirmishes between Iran and Israel concluded in October, speculation began on whether another round of potentially even more serious exchanges may follow.
On October 1, Iran attacked Israel with nearly 200 ballistic missiles. Tehran said the attack was in response to Israel’s “aggressive acts,” including the killing of Hezbollah leader Hassan Nasrallah in Lebanon. In return, Israeli Prime Minister Benjamin Netanyahu said Iran had “made a big mistake and will pay for it”.
Oil prices momentarily shot up on speculation that Israel would target Iran’s energy infrastructure. When that response came on October 26, the Netanyahu government chose only to target Iranian military sites, quite likely under U.S. pressure, and warned that deadlier attacks would follow should Tehran choose to respond.
A week later, Iran’s supreme leader Ayatollah Ali Khamenei promised to do just that. So what may follow and will such skirmishes result in a wider regional conflict? The prospect of it has once again brought tired old theories about the Iranians shutting down the Strait of Hormuz, a key maritime artery for crude oil and liquefied natural gas shipments from the Persian Gulf out to the Gulf of Oman and beyond, to the fore (see map).
Cargo volumes lend relevance to such discussions. Saudi Arabia, Kuwait, Iraq, Iran and to an extent United Arab Emirates’ crude roughly equating to 30% of the world’s traded oil, as well as Qatar’s Liquefied Natural Gas (LNG) cargoes pass through the Strait daily for the Iranians to disrupt. So will they? Won’t they? Can they? The answer is that while they certainly can, they probably won’t.
Reasons Why It May Not Happen And Won’t Last Even If It Does
For starters, doing so would invite a near immediate naval and air response from the U.S. with Donald Trump waiting for his keys to the White House again. It would leave Iran’s own coastline and all its ports vulnerable to a vastly superior American air and naval strike arsenal. Nearby Bahrain is home to the U.S. Navy’s Fifth Fleet.
Furthermore, the maneuver may not even get off the ground as at least four of the fleet’s combined task forces routinely patrol the Persian Gulf and the Strait and their surveillance may take away the element of surprise.
Secondly, the move itself would be self defeating and exceptionally silly as it would impact Iran’s own crude oil exports. According to industry data aggregator and research firm Kpler, Iran exported on average 1.65 million barrels per day of crude oil and gas condensate in the first five months of 2024.
Bulk of Iran’s exports go to China. Furthermore, nearly half of crude oil passing through the Strait – whether Iranian or not – in the region of 20.5 million bpd also heads to China, the world’s largest importer of black gold. A potential disruption would be very difficult to maintain under pressure from Beijing, one the world’s key takers of Iranian crude.
Thirdly, such an event, however temporary, has partially lost its potency given that not all regional crude exports would be knocked offline. Key exporters Saudi Arabia and the UAE have pipeline fall backs to pivot to. In the case of the Saudis, 5.1 million bpd can potentially be moved via the East-West pipeline and loaded up from the Red Sea. Although that is currently susceptible to attacks by Iran-backed Houthi rebel forces in Yemen.
The UAE is much better placed. Its Abu Dhabi to Fujairah pipeline – that went onstream in 2012 – has a capacity of 1.5 million bpd. Its end point – Fujairah – is the only one of the seven emirates that make up the UAE with a coastline that’s solely on the Gulf of Oman and not on the Persian Gulf that the Iranians are so fond of threatening to cut off.
And the port which bypasses the Strait has the capability to dispatch close to 75% of the UAE’s total crude output if needed, as pointed out by various attendees of energy event ADIPEC 2024’s Maritime & Logistics Conference that concluded in Abu Dhabi on Friday.
A straw poll of 25 senior maritime executives at the conference saw 21 deeming an Iranian attempt to cut off the Strait to be highly improbable, while only two saw it as probable, with the other two not offering an opinion. And as one surveyed executive rightly pointed out: “Iran has been threatening to do this for years but has never actually ever attempted to do it or done it and that is quite telling.”