The situation with Iran and the United States is moving toward a next phase. And while that motion currently seems positive, there are still risks. One of the biggest focuses is on a narrow waterway called the Strait of Hormuz, where the stakes are especially high for several Asian economies.
You've probably heard the big numbers about the Strait of Hormuz.
The U.S. Energy Information Agency says about 20% of the world's oil and a similar proportion of the world's natural gas move through the strait, which connects the Persian Gulf and the Arabian Sea.
At its narrowest width is about 21 nautical miles, roughly the distance from downtown Honolulu to Wahiawā.
Iran is on the northern side of the strait; to the south are Oman and the United Arab Emirates. Iran has threatened to close the strait; most analysts believe thatʻs not likely.
Secretary of State Marco Rubio said it would be “a suicidal move.” Asia would immediately feel the impact.
The Petroleum Association of Japan said about three-quarters of the countryʻs crude oil imports go through the Strait of Hormuz.
Estimates are similar for South Korea, which refines much of the oil it imports and then re-exports it, including some that comes to Hawaiʻi in the form of jet fuel.
Most significantly, China is a key customer for crude oil coming through the Strait, although precise numbers are impossible to confirm. An unclassified version of a report sent to Congress last fall by the Energy Information Administration shows a spike in Iranian oil exports to China in recent years.
That leads many observers to believe Beijing would not support any drastic change to its buying patterns for energy.
