For more than two weeks now, maritime traffic through the Strait of Hormuz has been disrupted. Many ships have been attacked, and many others trapped at either end of the strait, unwilling to risk passing through.
This has had not only regional but also global impact. The strait is a major gateway to global markets for many Gulf Cooperation Council (GCC) states. About 20 percent of the world’s petroleum and about one-fifth of global liquefied natural gas (LNG) flows pass through here. For this reason, the Strait of Hormuz is one of the world’s most strategically important sea corridors.
What is happening in the Straits is a widespread crisis. This needs to be addressed not just regionally but with global action.
energy trade disruption
After Iran blocked the Strait of Hormuz, several energy companies including Qatar Energy, Shell, Kuwait Petroleum Corporation and Bapco called for force majeure in the GCC countries. This is unprecedented in the history of oil and gas production in the Gulf region.
Iraq, the world’s sixth-largest oil producer, has had to cut oil production in the oil-rich region of Basra by 70 percent, from 3.3 million barrels per day (bpd) to 900,000 bpd, as most of its exports pass through the strait. Its announcement of 170,000 bpd exports via pipeline to Turkey is unlikely to make a difference.
In early March, Saudi Arabia, the world’s second-largest oil producer, was forced to close its largest facility, the Ras Tanura refinery, which processes 550,000 bpd. Riyadh has been able to reroute other oil production through the East-West Pipeline to the port of Yanbu on the Red Sea, bypassing the Strait of Hormuz. But despite this maneuver it has had to cut supplies to Asia.
The UAE also had to close its largest refinery and reroute oil through pipelines instead of exporting it through the Gulf.
As a result of these disruptions, oil prices have soared to nearly $120 per barrel.
The LNG sector has also suffered huge losses. Qatar, the world’s second largest LNG exporter, has had to stop production. UAE’s gas production has also been disrupted. As a result, Asian countries have suffered huge losses.
Qatar and the UAE account for 30 percent of China’s LNG imports, India 53 percent, Bangladesh 72 percent and South Korea 14 percent.
These disruptions have already caused price shocks in the global market. British wholesale gas prices have more than doubled, while the price of gas on the Dutch market has increased by 24 percent. Benchmark Asian LNG prices surged nearly 39 percent in early March.
Skyrocketing energy prices will inevitably have a negative impact on households and industries around the world, leading to inflation.
Possible violation of international law
The legal regime governing navigation through international straits is set out in the 1982 United Nations Convention on the Law of the Sea (UNCLOS). Under Article 38, ships and aircraft have the right of transit passage through straits used for international navigation. Article 44 states that coastal states cannot obstruct or suspend transit.
Although some regional states, including Iran, are not parties to UNCLOS, many of its core provisions reflect international law and are binding on all states. The customary nature of freedom of navigation through international straits predates UNCLOS and has been confirmed in international jurisprudence.
In the Corsica Channel case between the United Kingdom and Albania (1949), the International Court of Justice held that States have the right of innocent passage through a strait used for international navigation between two parts of the high seas, even without treaty arrangements. The court said that such straits are essential routes of international maritime communication and should remain open for peaceful navigation.
Even in situations of armed conflict, the law of naval war recognizes the importance of protecting neutral navigation through international waterways. The 1994 San Remo Manual on International Law Applicable to Armed Conflicts at Sea, which reflects widely accepted customary principles, stipulates that neutral ships may continue to transit international straits used for international navigation.
In this context, Iran’s threat to disrupt navigation or target commercial vessels in the Strait of Hormuz could violate its international obligations and constitute a wrongful act. The draft article on the responsibility of States for internationally wrongful acts, adopted by the International Law Commission in 2001, provides that a breach of an international obligation attributable to a State is its responsibility. The affected States may then demand cessation of the wrongful act, assurance that it will not be repeated, and compensation for economic losses caused by unlawful interference with navigation.
an urgent response
The international community must live up to its responsibility to protect navigation through the Strait of Hormuz, as disruptions affect domestic energy security and global market stability. Ensuring energy supplies, maritime security and freedom of navigation remains a shared responsibility.
Asian states, which are most affected by the closure, should take a tough stance. Countries like China, which have close relations with Iran, should pressure it to comply with international law.
The GCC, for its part, can do much to mitigate the risks and offset the costs. Gulf countries should accelerate efforts to diversify export routes. Options include building pipeline infrastructure within the GCC that could bypass the Strait of Hormuz by connecting energy producers directly to the Arabian Sea and the Red Sea. This can provide an important safety valve in times of crisis. Such investments will strengthen energy security for both the Gulf region and the global economy.
Without waiting for complete de-escalation, GCC states should implement the Gulf Cooperation Council’s Vision for Regional Security adopted at its 158th session held in Doha in December 2023. The security of oil and gas fields must be prioritized to ensure global energy supply and regional economic security. The Council should establish a dedicated force to protect energy infrastructure and prevent threats to security and territorial integrity.
The Strait of Hormuz is more than a regional flashpoint. It is the central artery of global energy trade and a key part of the international maritime system. Any attempt to close or militarize the strait risks immediate energy supply shocks and widespread economic disruption to global markets. International law requires that navigation through international straits remain open and unimpeded.
Upholding this principle is essential to global energy security and the preservation of the rules-based maritime order that supports international trade. In a time of rising geopolitical tensions, protecting the openness of the Strait of Hormuz is a global imperative.
The views expressed in this article are those of the author and do not necessarily reflect the editorial stance of Al Jazeera.
