The Strait of Hormuz and its Impact on Oil Prices in Times of Conflict
The Strait of Hormuz, a narrow passage connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea, plays a pivotal role in global energy security (The Strauss Center, 2020) . Approximately 20% of the world's oil, or about 17 million barrels per day, passes through this strait. Its strategic significance becomes even more pronounced during the conflict, directly influencing global oil prices. Historical Perspective: To understand the magnitude of the Strait of Hormuz's significance, consider the 1980s "Tanker War." During the Iran-Iraq war, both nations targeted oil tankers and merchant vessels in the strait ( The Tanker War | Proceedings - May 1988 Vol. 114/5/1,023 , 2020). As a result, marine insurance rates skyrocketed, leading to increased transportation costs pushing global oil prices higher. Another illustrative incident occurred in 2019 when two oil tankers were attacked near the strait (Wintour & Borger, 2019). Consequently, Bre...