According to sources, Iran has announced that it will only allow Chinese ships to pass through the Strait of Hormuz. This move is being described as a “grateful gesture” for China’s support. This decision could have serious implications for global oil supplies and supply chains

Amid the ongoing war in West Asia, Iran has taken a big decision regarding the Strait of Hormuz, one of the most important routes of global maritime trade. According to sources, now only Chinese ships will be allowed to pass through this route, which may create an earthquake in the global energy market. According to sources, this decision has been taken as a “gratitude” towards China’s stand in which Beijing had described the attacks of America and Israel as unacceptable. Chinese Foreign Minister Wang Yi, in a conversation with his Russian counterpart, had described the assassination of Iran’s Supreme Leader Ali Khamenei as “open murder of a sovereign leader”. China has already appealed for an immediate ceasefire and security of the sea routes.

Why is Hormuz important?

It connects the Persian Gulf to the open sea.
Oil and gas export lifeline for countries like the United Arab Emirates and Qatar
About 20% of the world’s oil supply passes through this route.
Extremely important for Asian markets, especially China and India
Iran’s blocking of this route is likely to cause major disruption to the global supply chain.

Iran’s Islamic Revolutionary Guard Corps (IRGC) has said it has “full control” of the strait and ships passing without permission will be at risk of missile or drone attacks. Experts believe that if the ban continues for long, the world could be heading towards a major energy crisis.

Global Impact

·         A Sharp Rise in Oil Prices is Possible

·         Energy Security in Asia and Europe is at Risk

·         Volatility in global markets

·         Steep increase in marine insurance and shipping costs

PC:Punjab Kesari