As the U.S. sanctions on Iran’s oil industry have already started to mount pressure on Tehran and have halved Iranian oil exports, the Islamic Republic announced that its Navy would hold an annual drill in the Strait of Hormuz—the world’s most important oil chokepoint.
Iran will begin on Friday a three-day drill in the Strait of Hormuz, with maneuvers extending as far as the Sea of Oman and the Indian Ocean, The Associated Press quoted Iranian Admiral Hossein Khanzadi as saying on Iran’s state TV on Thursday.
Warships, submarines, helicopters, and surveillance aircraft will take part in the drills, which will also include missile launches from the vessels.
Last September, a month after the U.S. imposed sanctions on Iran’s financial industry and less than two months before the U.S. sanctions on Iranian oil kicked in, the Islamic Republic’s Air Force and the Islamic Revolution Guards Corps held fighter jet drills near the Strait of Hormuz, which Iran has threatened to close for all tanker traffic if the U.S. drives Iranian oil exports to zero.
In August, Iran 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: The Ultimate Tool To Prop Up Oil Prices
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 and have additional pipeline capacity to bypass the Strait of Hormuz, which is a route of more than 30 percent of 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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