World oil users will be left high and dry if Iran seals off Hormuz water-passage
November 9, 2012
Strategic oil reserves will be needed if Iran seeks to close the choke point Strait of Hormuz because overland pipelines can only carry one-third of the oil supplies that move through the waterway, an Arab energy group has warned.
The Tehran regime has threatened to block the 112-mile strait, the only way in and out of the Persian Gulf, if the United States attacks over the Iranian nuclear program.
The reduction in oil exports from the gulf, as well as a complete halt to natural gas shipments, an Iranian closure, even one lasting a few weeks, will batter the global economy by sending energy prices soaring unless steps are taken to ensure that the shortfall is covered.
Shutting down Hormuz, the Arab Petroleum Investment Corp. observed, “should prompt the International Energy Agency to act alone to ensure the oil market remains well supplied by using its strategic stockpiles.”
“In the event of a crisis, Saudi Arabia’s spare production capacity would obviously be useless,” it said.