Iran and the oil price: do the mullahs block the street of Hormus?

The calculation is simple, effective, but risky: the passage through which all oil tankers through throughout is only a few kilometers wide; It was relatively easy to go or take them under fire. For the tankers, filled with the lubricant in the world, there would be no way through. 20 percent of global oil transport would come to a standstill, the oil price would explode, there is a risk of an international economic crisis.

This could be roughly the result if Iran would react to the US bombardment of its nuclear facilities with a blockade of the Hormus street-a scenario that many experts and presumably also by some Iranians themselves, as a possible answer to the attacks.

Other retaliation alternatives are bloody and difficult to calculate: terrorist attacks would be conceivable “soft”i.e. civil goals or rocket attacks on the US military in the neighborhood. Around 40,000 US soldiers are stationed at bases around the Persian Golf, for example in Bahrain and Qatar. The United States is likely to strike back with full hardness.

A sea blockade, on the other hand, is likely to cost significantly less human lives. The sea between Iran and Oman is 55 kilometers wide in the narrowest point and one of the most important routes for global oil and gas shipping. 33 million barrels of crude oil pass the Persian Gulf every day-including from Iraq and Saudi Arabia, but also from Iran itself.

A blockade of the Hormus street hit the global economy at a sensitive point, but at what price? Because the Mullah regime would hinder its own, urgently needed oil exports. The country sells almost 80 percent of its raw material to China via a shadow fleet. And the oil dollars migrate into the pockets of the powerful and mullahs, that is, those who would close the sea route.

It is undisputed that the oil price would suffer worldwide. How much, however, also depends on how effective the street can be blocked by Hormus and for how long. Since the beginning of the Israeli attacks on Iran, the barrel of the Brent oil variety has increased by around ten percent – from 65 to $ 74. Ulrich Kater, chief economist at Dekabank, assumes that a closure of a few weeks would be manageable – even if the oil price would increase to $ 100 or a little more.

What is certain is that with a closure of the noble farm of the global economy, the Iranian regime would harm itself and also pull the wrath of the neighbors and that of the rest of the world. For China, access to oil is as important as access to the Arab markets. The same applies to the USA. US President Donald Trump and possible Allies will not hesitate long to end a blockage of the Hormus street quickly.