The collapse likelihood in the global oil market due to the Strait of Hormuz

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the news agency URA.ru on the probability of a collapse in the global oil market due to the Strait of Hormuz.

Despite the importance of the Strait of Hormuz, its closure by Iran will not lead to a collapse in supplies. According to Alexey Gromov, a significant part of the raw materials that are being transported by tankers through the strait today can be shipped by exporters in other ways.

"The Strait of Hormuz is very important, 30% of the world's oil trade passes through it, but most of the oil-producing countries in the region have alternative delivery options to foreign markets. Saudi Arabia has an oil pipeline connecting production facilities in the Persian Gulf with a port in the Red Sea. It has never been fully operational, but the volume of transportation through it can be up to 5 million barrels per day — two thirds of the country's oil exports. The UAE also has a port in the oceanic part, outside the Strait of Hormuz.

Only Bahrain, Qatar, Iraq and partly Iran itself will have problems," the expert explained.