![](file:///C:/Users/user/AppData/Local/Temp/msohtmlclip1/01/clip_image001.png)
The Strait of Hormuz, located between Oman and
Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The
Strait of Hormuz is the world's most important oil chokepoint because of the
large volumes of oil that flow through the strait. In 2018, its daily oil flow
averaged 21 million barrels per day (b/d), or the equivalent of about 21% of
global petroleum liquids consumption.
Chokepoints are narrow channels along widely
used global sea routes that are critical to global energy security. The
inability of oil to transit a major chokepoint, even temporarily, can lead to
substantial supply delays and higher shipping costs, resulting in higher world
energy prices. Although most chokepoints can be circumvented by using other
routes that add significantly to transit time, some chokepoints have no
practical alternatives.
Volumes of crude oil, condensate, and
petroleum products transiting the Strait of Hormuz have been fairly stable
since 2016, when international sanctions on Iran were lifted and Iran’s oil
production and exports returned to pre-sanctions levels. Flows through the
Strait of Hormuz in 2018 made up about one-third of total global seaborne
traded oil. More than one-quarter of global liquefied natural gas trade also
transited the Strait of Hormuz in 2018.
![volume of crude oil, condensate, and petroleum products transported through the Strait of Hormuz](file:///C:/Users/user/AppData/Local/Temp/msohtmlclip1/01/clip_image002.png)
Source: U.S. Energy Information
Administration, based on Short-Term Energy Outlook (June
2019), ClipperData, Saudi Aramco bond prospectus, Saudi Aramco annual reports,
Saudi Ports Authority, International Group of Liquefied Natural Gas Importers,
and U.N. Conference on Trade and Development
Note: LNG is liquefied natural gas; Tcf is trillion cubic feet
There are limited options to bypass the Strait
of Hormuz. Only Saudi Arabia and the United Arab Emirates have pipelines that
can ship crude oil outside the Persian Gulf and have the additional pipeline
capacity to circumvent the Strait of Hormuz. At the end of 2018, the total
available crude oil pipeline capacity from the two countries combined was
estimated at 6.5 million b/d. In that year, 2.7 million b/d of crude oil moved
through the pipelines, leaving about 3.8 million b/d of unused capacity that
could have bypassed the strait.
![operating pipelines that pass through the Strait of Hormuz](file:///C:/Users/user/AppData/Local/Temp/msohtmlclip1/01/clip_image003.png)
Source: U.S. Energy Information
Administration, based on ClipperData, Saudi Aramco bond prospectus (April 2019)
Note: Unused capacity is defined as pipeline capacity that is not
currently used but can be readily available.
Based on tanker tracking data published
by ClipperData, Saudi Arabia
moves the most crude oil and condensate through the Strait of Hormuz, most of
which is exported to other countries (less than 0.5 million b/d transited the
strait in 2018 from Saudi ports in the Persian Gulf to Saudi ports in the Red
Sea).
EIA estimates that 76% of the crude oil and
condensate that moved through the Strait of Hormuz went to Asian markets in
2018. China, India, Japan, South Korea, and Singapore were the largest
destinations for crude oil moving through the Strait of Hormuz to Asia,
accounting for 65% of all Hormuz crude oil and condensate flows in 2018.
![](file:///C:/Users/user/AppData/Local/Temp/msohtmlclip1/01/clip_image004.png)
In 2018, the United States imported about 1.4
million b/d of crude oil and condensate from Persian Gulf countries through the
Strait of Hormuz, accounting for about 18% of total U.S. crude oil and
condensate imports and 7% of total U.S. petroleum liquids consumption.