Whether President Donald Trump wins the Third Gulf War will depend a lot on whether the Pentagon can effectively reopen the Strait of Hormuz for oil shipping, and soon. The American military doesn’t have weeks to do so — only days.
The waterway is the world’s most important oil chokepoint, transporting about 20% of the world’s crude and refined petroleum products. Four days into the war, the strait, two narrow lanes deep enough for the largest oil tankers, is largely closed to tanker traffic. Only a handful of small- and medium-sized tankers have crossed it, typically at night and with their location transponders switched off. But the large oil tankers that are the workhorse of oil shipping are avoiding it.
The stoppage isn’t due to radio messages by the Iranians claiming the strait is closed. Since the attack on Iran began, the U.S. has asked oil companies, oil traders and tanker owners to steer clear as a precaution, and most have complied. Of course, everyone in the industry is concerned about the potential for Iranian attacks — and a few tankers have been hit, although those strikes have happened far from the strait itself.
The U.S. Navy is slowly claiming full control of the region, sinking several Iranian warships. There’s no indication Tehran has laid mines in the strait, and multiple bulk carriers and other vessels are crossing the waterway unimpeded. But Iran can still fire short-range missiles from its coast, plus inexpensive drones.
The most urgent task is to get tankers inside the Persian Gulf — not out — because storage capacity is limited. Crude production in the region continues and, until now, enough tankers were trapped to take onboard that output. But once those ships are full, countries will need to divert to onshore storage, also limited. Sooner rather than later, oil production will need to slow. So far, loadings have continued at a normal pace in Saudi Arabia, Kuwait, Iraq, the United Arab Emirates, Qatar and, too, Iran. Despite talk about an attack on Kharg Island, Iran’s main oil port, satellite pictures don’t show any evident damage (or smoke) and loadings there have continued. Iraq looks like the first candidate to run out of storage and have to slow production.