Iran’s weaponization of the energy and trade flows through the Strait of Hormuz amounts to economic terrorism against every nation in the world, according to the United Arab Emirates (UAE), which has seen its LNG and most oil supply choked at the vital chokepoint.
“Twenty million barrels a day. Nearly a fifth of the world’s oil and gas. Over a third of the world’s fertilizer. Almost a quarter of the world’s petrochemicals and significant amounts of industrial metals,” Sultan Ahmed Al Jaber, UAE Minister of Industry and ADNOC Managing Director and Group CEO, said at the CERAWeek conference in Houston, referring to the Strait of Hormuz.
“In short, much of the oxygen of the global economy runs through a single throat. Yet, Iran believes that choking it is an acceptable strategy,” Al Jaber added.
Since the U.S.-Israeli strikes on Iran began on February 28, the daily traffic of over 100 vessels, including tankers, through the Strait of Hormuz, has slowed to a trickle of a handful of passages per week, all cargoes apparently approved for transit by Iran.
The shock to the global energy supply has been immediate, with Asian refiners scrambling for non-Middle Eastern supply and paying record-high premiums for alternative crude grades, while cutting refinery run rates. Oil prices have jumped by 50% in March, Asian spot LNG prices hit multi-year highs, and Europe’s benchmark natural gas price doubled from a month ago.
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“Weaponizing the Strait of Hormuz is not an act of aggression against one nation. It is economic terrorism against every nation. And no country should be allowed to hold Hormuz hostage, not now, not ever,” ADNOC’s Al Jaber said.
“And while we appreciate all efforts to stabilize markets and reduce prices, this is not a supply issue. It is a security issue, and it has only one durable answer, keeping the Strait open,” the executive noted.
“We cannot trade our way out of this crisis.”
By Charles Kennedy for Oilprice.com
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