DATA & FIGURES
The number of vessel crossings through the Strait of Hormuz increased slightly on July 14, with 21 confirmed crossings recorded, according to MarineTraffic data. Additionally, the Saudi East-West Pipeline has hit a record 7 MMb/d, while UAE Fujairah crude loadings have reached capacity.
THE SCENARIO
The ongoing tensions between the US and Iran have created a volatile situation in the Strait of Hormuz, with the International Maritime Organization warning of the dangers of commercial shipping in the area. However, US-allied Gulf countries are in the process of undertaking a 'great energy rewiring' to bypass the Hormuz chokepoint, which could render Tehran's leverage over the critical waterway increasingly irrelevant over time.
DIRECT QUOTE
"I will maintain the message of upholding international law, for countries to do the same thing, and for companies — at this stage, particularly with the volatility — not to take risk to transit through the strait of Hormuz" — Arsenio Dominguez, Secretary General, International Maritime Organization
BBN INSIGHT
The situation in the Strait of Hormuz has significant implications for global energy markets and commercial shipping. The Positive Side: The 'great energy rewiring' undertaken by US-allied Gulf countries could lead to increased energy security and reduced dependence on the Hormuz chokepoint, benefiting global markets and consumers. The Negative Side: The ongoing tensions and volatility in the region could lead to increased costs and risks for commercial shipping, potentially disrupting global supply chains and impacting businesses and consumers.