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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

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Iran Starts Air Force Drills Near The World’s Crucial Oil Chokepoint

Iran’s Air Force and the Islamic Revolution Guards Corps began on Friday fighter jet drills over the waters near the world’s most important oil chokepoint, the Strait of Hormuz, Iran’s IRNA news agency reported on Friday.

Aircraft including nine F-4, six Sukhoi, and four Mirage started the war games in the Persian Gulf and the Sea of Oman waters, IRNA said.

The maneuver is a warning that Iran’s enemies will face a “stern response” if they show ill-will toward Tehran, the AP quoted the official Iranian news agency as saying.

Earlier this year, Iran threatened to close the Strait of Hormuz for all tanker traffic if the U.S. drives Iranian oil exports to zero.

As the first round of U.S. sanctions on Iran kicked in last month and the second round of sanctions—including on Iranian oil exports—is set to snap back in early November, the Islamic Republic has recently stepped up rhetoric about controlling the most vital oil flow chokepoint in the world.

U.S. Secretary of State Mike Pompeo rebuffed Iran’s claims saying in a statement posted on Twitter: “The Islamic Republic of Iran does not control the Strait of Hormuz.” Related: Saudi Oil Inventories Continue To Plummet

The Strait of Hormuz is the world’s most important chokepoint, with an oil flow of 18.5 million bpd in 2016, the EIA estimates. The Strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea and is the key route through which Persian Gulf exporters—Saudi Arabia, Iran, Iraq, Kuwait, Qatar, the UAE, and Bahrain—ship their oil. Only Saudi Arabia and the UAE have pipelines that can ship crude oil outside of the Persian Gulf with additional pipeline capacity to bypass the Strait of Hormuz, which is a route of more than 30 percent of the daily global seaborne-traded crude oil and petroleum products and more than 30 percent of the liquefied natural gas (LNG) flows.

Some 80 percent of the crude oil shipped through the Strait of Hormuz goes to Asian markets, the EIA has estimated using data from Lloyd’s List Intelligence tanker tracking service. China, Japan, India, South Korea, and Singapore are the largest destinations for oil moving through the Strait of Hormuz.

By Tsvetana Paraskova for Oilprice.com

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