Tensions,the,Middle,East,Incre business, insurance If Tensions in the Middle East Increase, These Oil Shipping


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As tensions, demonstrations, and unrest play out across the Middle East, the possibility of oil related terrorism has increased. Here are the three biggest choke points in the region. Any violent activity at any of these locations could send oil prices soaring.The Strait of Hormuz – Located between Oman and Iran, the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait is the most important choke point in the world due to the 15.5 million barrels (2009) that flows out on a daily basis. This oil flow through the Strait equals about one third of all seaborne traded oil and 17 percent of the total of oil traded worldwide. The Strait, on average, sees 13 full crude oil tankers per day eastbound through the Strait with the same number of empty ones heading west to be filled with new cargo. More than 75 percent of these crude oil exports went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations. The Strait narrows to 21 miles wide, but the shipping lane is only two miles wide. The strait handles all sizes of tankers up to the Ultra Large Crude Carrier class (ULCC).The Suez Canal is located in Egypt which is currently dealing unrest at several different locations beyond Cairo. The Suez connects the Red Sea and Gulf of Suez with the Mediterranean Sea, with a length of 120 miles. Petroleum, including crude oil and refined products, made up 16 percent of Suez cargos in 2009. An estimated 1.0 million bbl/d of crude oil and refined petroleum products flowed through the Suez Canal to the Mediterranean Sea in 2009, while 0.8 million bbl/d travelled southbound into the Red Sea.The Suez is only 1,000 feet wide at its narrowest point, making it unable to handle the VLCC (Very Large Crude Carriers) and ULCC (Ultra Large Crude Carriers) class crude oil tankers. The narrowest areas of the Suez could enable an attack on a ship from land.The Strait of Bab el-Mandab – This strait is a chokepoint between the horn of Africa and the Middle East, and is a strategic link between the Mediterranean Sea and Indian Ocean. The notorious Somali pirates prey on ships upon their exit from the Bab el-Mandab. It is located between Yemen, Djibouti, and Eritrea, and connects the Red Sea with the Gulf of Aden and the Arabian Sea. An estimated 3.2 million bbl/d flowed through this waterway in 2009 headed toward Europe, the United States, and Asia. The majority of traffic, about 1.8 million bbl/d, moved northbound through the Bab el-Mandab en route to the Suez/SUMED complex.As the Somali pirates have proven repeatedly, even beefed up security cannot guarantee the safety of all ships. With the Middle East heating up, that safety of these ships is unsure than ever.

Tensions,the,Middle,East,Incre

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