Why this narrow strip of water has the world on edge
Sydney Morning Herald
by Stephen BartholomeuszMarch 2, 2026
AI-Generated Deep Dive Summary
The Strait of Hormuz, a narrow waterway in the Middle East just 33 kilometers wide at its narrowest point, is currently at the center of global oil industry concerns. This critical chokepoint carries about 20% of the world's oil and a third of its liquefied natural gas (LNG) daily. With tensions rising due to US-Israeli airstrikes on Iran, analysts warn that even a partial disruption could send oil prices skyrocketing to over $100 per barrel, creating a crisis unmatched in decades. While the strait remains open for now, with some tankers passing through and others waiting offshore, economic factors are already driving up tanker charter rates and insurance costs, effectively slowing down shipments without the need for physical blockades.
Iran’s actions, including targeting oil tankers and threatening to close the strait, have heightened fears of a broader conflict. If the conflict escalates beyond Iran’s borders, involving countries like Bahrain, UAE, Qatar, and Kuwait, the potential for long-term damage to regional oil infrastructure increases. This could have lasting consequences for global supply chains, as much of the world's refining and export capacity is concentrated in this region. Even if Iran's own production were disrupted
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Originally published on Sydney Morning Herald on 3/2/2026