The Hormuz Effect and Criticality of Prime Chokepoints

A bulk carrier and tanker sit anchored off Muscat, Oman, on March 9. (Photo: Reuters)

The U.S.-Israel strikes on Iran impacting tightly controlled access to the Strait of Hormuz, a critical energy chokepoint, has halted 20% of global oil shipments pushing up global energy prices unprecedentedly. 

In a revealing account of war's hidden cost two most vital commodities, after oil that stand at the brink of expanding the crisis are food and fertilizer. The World Food Program (WFP) estimated the crisis can push around 45 million people into food insecurity if the conflict does not end anytime sooner, expanding the span and impact of the spiraling crisis, especially for the vulnerable population.

The blockade severely disrupted food aid shipments to the Middle East and surrounding regions. An estimated 70,000 metric tonnes of WFP cargo is stuck in ports. Reports state, crisis struck Afghanistan bound food aid containers have been returned to the WFP. The ripple effects are predicted to make the food insecurity worse, essentially in conflict ridden countries like Somalia and Sudan or regions that suffer from climate related shocks.

The Hormuz crisis comes as layering on pre-existing food insecurity fueled by conflict and environmental hazards. Food insecurity will seemingly get worse in conflict ridden countries like Somalia and Sudan or regions that suffer from conflict and drought. Besides food the rise in oil and fertilizer prices will further impact crop yields impacting the food supply chain. 

As the global economy continues to pay the cost of a deeply 'personal' national interest driven conflict, closer look at the international law codified in the United Nations Convention on the Law of the Sea (UNCLOS) all ships and aircraft have a right of transit passage, “which shall not be impeded,” and that “there shall be no suspension of transit passage” through a strait. 

Iran And The “Transit Passage” Regime

The “Law of Marine Areas of the Islamic Republic of Iran in the Persian Gulf and Oman Sea,” passed in 1993, allows Iran to suspend the passage of foreign ships in its territorial waters and requires prior authorization for the passage of warships, submarines, and vessels carrying “dangerous or harmful materials with respect to the protection of the environment.” While a party to the UNCLOS, Oman has made similar declarations requiring warships to seek “prior permission” to pass through its territorial waters. 

Major maritime powers' claims are inconsistent with the 1982 UNCLOS. For example, the U.S. Freedom of Navigation program considers the UNCLOS transit passage regime reflective of customary international law. 

Article 51 of the UN Charter, allows a state to act in self-defense “if an armed attack occurs”. As per the implied meaning, Iran can make a self-defense claim to justify its attacks in the strait necessary to repel the armed attack and proportional to the threat. 

The UNCLOS’s transit passage regime is designed to keep chokepoints open. The law of naval warfare, as reflected in the Hague Conventions and customary international law, allows a blockade, only under certain conditions that Iran cannot legitimize in its actions. 

Criticality of Chokepoints

The spiraling crisis has exposed the vulnerability of global chokepoints responsible for large volumes of trade and transit. They are geographical crossroads for large clusters of networked computer servers and rare mineral processing chains making them strategically significant.

For example, the added strategic value to Taiwan Strait for semiconductors or South Korea’s emergence as a critical node in memory, or Netherland's ASML as the sole commercial supplier of extreme ultraviolet lithography machines. The map of vulnerability is yet to find a diversified solution in an increasingly conflict-ridden, inward-looking world driven by ultra-nationalist governments. 

Climate change challenges add to the prevailing woes of the strategic chokepoints, Panama Canal being a prime example. Reduced water levels in the Panama Canal has increased canal traffic, pushing up wait time in the sea highlighting climate stress as a geopolitical variable.

The criticality of maritime chokepoints in warfare draws parallel from past world wars. During the First World War, Dardanelles Strait was instrumental in strengthening the Ottoman Empire’s position in the war. The Strait of Dover (and English Channel), Skagerrak and Kattegat (Danish Straits), Strait of Gibraltar, Strait of Otranto, and Suez Canal were other naval waterways crucial during the war. Strategic maritime chokepoints played a decisive role even during the Second World War, shaping global supply lines through blockades and military campaigns across the Mediterranean, Atlantic, Indian, and Pacific Ocean theaters.

Oil, food, and fertilizer sits at the intersection of sovereignty and national resources. It is the leading driver of insecurity outpacing economic downturn and climate shocks. Also, war tends to damage critical infrastructure and hampers access to amenities also causing significant damage to agricultural land and harvests.

The impact of conflicts through the global economy reflects the interconnectedness of threats. The decline of Iraq’s date industry following the Iran-Iraq War (later deepened by the US invasion in 2003), fall of rice production in the Mekong Delta by the Vietnam War, and the collapse of Yemen’s coffee exports triggered by internal conflict are prime examples.

Amid escalating tensions, war risk premiums for commercial shipping have spiked up. According to recent reports, premiums across most exposed routes are now seeing rates between 3% and 7.5% while insurance cost in other high-risk maritime corridors have climbed to 1-1.5% of a vessel's value.

Drawing from the Black Sea Grain Initiative, a UN-mediated agreement between Russia and Ukraine, high level political dialogue to ease the flow of essential items through Strait of Hormuz is important to prevent the crisis taking a bigger shape. Further, the vulnerabilities call for an early review of the existing international maritime laws responding to the emerging crisis.

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This article was written by Dr. Angana Guha Roy, an independent researcher based in New Delhi. Previously, she worked as an Associate Director at the Asian Institute of Diplomacy and International Affairs. She has also served as a Fellow for the John Lukacs Institute for Strategy and Politics (Ludovika University of Public Service) and the Hungarian Institute of International Affairs in Budapest. Dr. Roy completed her Ph.D. in Foreign Policy at the University of Delhi, focusing on middle powers in international relations. While pursuing her Ph.D., she worked with several prestigious think tanks in New Delhi, such as the Indian Council for Research on International Economic Relations (ICRIER) and the Delhi Policy Group.