Sandwiched between the Persian Gulf and the Gulf of Oman, the Strait of Hormuz is the only sea passage connecting the Persian Gulf to the open ocean. In other words, it is the lifeline of the Arab world, the most notable among them being Kuwait, Saudi Arabia, Bahrain, Qatar, and the United Arab Emirates.
Although the narrowest point in the strait is just 33km wide, the shipping lanes in both directions are only 3km wide.
If you’ve been following maritime incidents, you’d know that this Strait is in the frontline when it comes to the battle between Iran and the United States. So much so that the United States Fifth Fleet, based in Manama, Bahrain, is responsible for protecting maritime shipping lanes in this region.
There’s a popular saying in the Maritime sector: Whatever happens in China, affects global shipping. Remember the beginning of the COVID-19 pandemic when ports all across China were closed off? According to Alphaliner, more tonnage of container ships remained idled around the world than during the global financial crisis during this period. Daily charter rates for tankers and bulk freighters plummeted more than 70% from normal levels as China bought less oil, iron ore, and coal.