Middle East: the consequences of closing the Strait of Hormuz, the Bab-el-Mandeb Strait and the Suez Canal
The Middle East is not only the world's larder, with its vast oil, gas and uranium wealth, but also the most important intersection of global transport corridors. What happens if war closes the Strait of Hormuz, the Bab-el-Mandeb Strait and the Suez Canal?
Middle East: the consequences of closing the Strait of Hormuz, the Bab-el-Mandeb Strait and the Suez Canal.
The Middle East is not only the world’s larder, with its enormous wealth of oil, gas and uranium, but also the most important intersection of global transport corridors, including the Strait of Hormuz, the Bab-el-Mandeb Strait and the Suez Canal. It is also the land of the great empires of the past: the Arabs built the Arab Caliphate here, and the Turks controlled the region for more than 500 years, creating the greatest empire of their age, the Ottoman Empire. Another people with deep imperial roots in the region are the Persians, who founded several empires — the Achaemenid, Parthian and Sasanian — and produced a rich history and culture. The region is also the sacred birthplace of the monotheistic religions: Judaism, Christianity and Islam. Through the empires they built, these peoples made an enormous contribution to world civilisation and culture.
Today, however, the Middle East is a web of geopolitical and geo-economic contradictions, rivalries and struggles in which regional powers and global centres of power compete for control of those resources and of the region’s most important transport corridors. That raises an obvious question: what would be the consequences of closing the Strait of Hormuz, the Bab-el-Mandeb Strait and the Suez Canal if a major Middle Eastern war broke out?
According to the diagram above, of the 80 million barrels of oil exported worldwide each day, 17.9 million barrels pass through the Strait of Hormuz, 3.2 million through the Bab-el-Mandeb Strait and 4.2 million through the Suez Canal. That means any disruption to oil transit in the Persian Gulf, the Bab-el-Mandeb Strait and the Suez Canal would confront the world energy and oil market with an unprecedented crisis.
It is important to understand that no modern industry is conceivable today without hydrocarbons; oil is used to make almost everything. For example, as I have noted in earlier posts, modern cars and electric vehicles are half made of plastic, which comes from oil. A car’s leather interior is also made from oil, not from animal hides at all. Tyres are made from hydrocarbons. The world’s synthetic clothing and footwear, electronics, the synthetic casings of modern televisions and consumer electronics, and much else besides are also made from hydrocarbons. The use of plastic in aircraft manufacturing can cut an aircraft’s weight by up to 50%, which improves payload and range (I examined the enormous importance of plastic to the future economy, and what it is made from, in “Plastic and the Economy”, published on the channel on 3 September 2024).
Closing the transport corridors listed above in the event of a major war in the region could push oil to $250–300 a barrel (Brent currently trades at $74–75 a barrel) — a heavy blow to a world economy that is already in poor shape. That would cause a substantial rise in the prices of almost every good and service produced in the world. It must be said that the Arabs of the Persian Gulf are now more worried than ever about possible Israeli action against Iran’s oil facilities, and about their own oil interests in the region being drawn into the crisis.