Iran US Tensions: Iran’s Ayatollah Ali Khamenei’s regime has ordered the closure of Strait of Hormuz, which is often referred to as the world’s oil lifeline and strategic gateway to the Persian Gulf.
Many reports in the media suggested that Iran has started live-fire drills in the Strait’s waterways that handle around 20 percent of the world’s global shipments. The 33-km Strait of Hormuz, which runs between Iran and Oman, funnels approximately 20 million barrels every day along with 1/5th of liquefied natural gas (LNG). The closure of Strait of Hormuz for too long could easily turn into an economic catastrophe of about $2 trillion.
DON'T MISS
Iran US Tensions- Trump Retaliation On The Cards?
The unprecedented decision of Tehran to close down the Strait of Hormuz, timed along with live-fire drills, may signal retaliation to the Trump administration. There is a high probability that the US government would not take this development lightly and ignite full-scale conflict.
Hormuz’s Strategic Chokepoint Role
The Strait of Hormuz stands as energy artery of the Middle East, which is irreplaceable for Gulf exporters such as the United Arab Of Emirates and Saudi Arabia. Iran controls a significant majority of the strait’s northern shoes.
For the United States, securing the Strait of Hormuz is an important task on hand. Pentagon forces have gone on high alert and ready with warships and airstrikes to wage a full-scale war against the Ayatollah Ali Khamenei regime.
According to market analysts, the shutdown could force a massive surge in crude oil prices. A $4 gallon hike could be possibly on the cards; many in the political circles call this an economic suicide by Iran, prepping naval clashes. Many forecast $110 Brent short-term, up to $130 if sustained, dwarfing 2019 spikes.
