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CHOKE POINTS: THE CURSE OF STABLE OIL TRADE

PRANSHU PRALEYA (12BPE087)

PRAKHAR SARKAR (12BPE097)

“Choke Points”, as could be inferred superficially from the term, refers to narrow channels or

geographical features at sea typically straits. They are the spots that pose restrictions and

difficulties to large-scale transit of commodities and people through them. Oil Chokepoints are

narrow channels along widely used global sea routes, some so narrow that restrictions are placed

on the size of the vessel that can navigate through them. They are a critical part of global energy

security due to the high volume of oil traded through them.

Right from influencing war outcomes to forming a critical part of global energy security, Oil

Choke Points wield a substantial leverage over the realm of Oil Trading and Transit. Since their

historic inception, they have been the critical flare-up points that have led to the use of

alternative routes particularly the pipelines for safer and more stable avenues of oil trading. In

context of oil transit volume, the Strait of Hormuz(16 MMbbls/d) leading out to the Persian Gulf

and the Strait of Malacca(15.2 MM bbl/d) linking the Indian and Pacific Oceans are the world’s

most strategic and potentially volatile choke points. Apart from these, the Suez Canal (2.97

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MMbbls/d) of Egypt and the Bab-el-Mandab (3.4 MMbbls/d) of Somalia are the other important

choke points. The blockage of a choke point, even temporarily, can lead to substantial increases

in total energy costs. For instance, the significance of Strait of Hormuz is repeatedly reminded

 by constant threats delivered by Iran implying abrupt closure and mining of the strait that would

have a calamitous impact on oil prices for the countries that depend on Middle Eastern oil.

Hence, in order to maintain unhindered oil trade through these routes, America maintains its 5 th Fleet to maintain the sanctity of these waters while other global powers deploy their navies to

 patrol and prevent sea piracy.

The Strait of Hormuz alone can be associated with about 20% percent of oil traded worldwide.

More than 85 percent of these crude oil exports go to Asian markets, with Japan, India, SouthKorea, and China representing the largest destinations. India alone carries out 71% of its oil trade

through these waters. In an effort to ensure uninterrupted supply of oil and gas and subsequently

exert geopolitical influence, China is proactively implementing its “String of Pearls” Doctrine.

The situation sounds similar in the other states also who are actively looking forward to

safeguard their own interests. The status quo of current developments call for commensurate

action by India to secure its oil trade routes and take immediate steps to develop alternate routes

like the Iran-India Pipeline. It would be interesting to observe how present day ambitious global

 powers seek to achieve unhindered oil trade through the shortest possible routes avoiding

 potential skirmishes escalating to crises.