Iran will close parts of the critical oil shipping lane in the Middle East, the Strait of Hormuz, for a few hours on Tuesday as it is conducting military drills in the area, Iran’s Fars news agency reports.
The partial closure is due to “security precautions,” per the semi-official Iranian news agency cited by Reuters.
Iran’s naval forces of the Islamic Revolutionary Guard Corps (IRGC) on Monday launched a military drill, dubbed “Smart Control of the Strait of Hormuz,” on the eve of the next round of indirect U.S.-Iran nuclear talks in Geneva.
“Drones deployed during the naval exercise of the Islamic Revolution Guard Corps (IRGC) in the Strait of Hormuz—capable of striking both aerial and maritime targets—are among the force’s newest strategic assets, officials said,” Fars reported on Tuesday.
The Strait of Hormuz is the world’s most critical oil transit chokepoint, and the oil market has time and again feared Iran could attempt to close the lane.
Analysts have said that the possibility of a closure, which would be the ‘mother of all disruptions’, is a low-probability scenario.
Tuesday’s partial closure of some parts of the critical oil shipping lane is part of an Iranian military drill.
The narrow lane between Iran and Oman is the key export route of all major oil producers in the Gulf, and very few alternatives exist to move oil out of the strait if it is closed.
The Strait is the main export route of Middle Eastern oil to Asia and the key artery of exports of all major producers in the region, including Iran itself.
But only Saudi Arabia and the United Arab Emirates (UAE) have operating pipelines that can circumvent the Strait of Hormuz. Iran has the Goreh-Jask pipeline and the Jask export terminal on the Gulf of Oman to avoid the Strait of Hormuz, but it hasn’t used this route much over the past years, EIA data show.
In 2024, oil flow through the strait averaged 20 million barrels per day (bpd), or the equivalent of about 20% of global petroleum liquids consumption, the EIA estimates.
By Charles Kennedy for Oilprice.com
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