The Strait of Hormuz: figuring out the conundrum

By Mobeen Jafar Mir

The Strait of Hormuz, a narrow sea channel situated between the Persian Gulf and the Gulf of Oman, is one of the most important maritime chokepoints in the world. The significance of the Strait can be gauged from the fact that five of the world’s top oil producing giants – Saudi Arabia, Kuwait, Bahrain, Iraq, and Iran – use this narrow channel to import their oil to every nook and cranny of the world. The ongoing crisis in the region, where the U.S. and Iran are crossing sword with each other, has become an overriding concern for policy makers of all around the world and, Pakistan’s national interests, for a number of reasons, are more at stake than any other state.

To begin with, it is the issue of navigational rights where the shoe is pinching. Ships carrying oil from the Gulf have to pass through the Strait of Hormuz, which becomes as narrow as 21 nautical miles at a junction making it vulnerable to attacks and blockade. This volatile point is situated between the Larak Island of Iran and the Quioins of Oman, hence comes in the territorial waters of Iran and Oman. Pakistani international law experts should devise a comprehensive mechanism with Iran to figure out legal complexities in case Iran opts for closure of the Strait.

Similarly, any imminent flare-up in the Persian Gulf will put Pakistan at a great disadvantage. Due to ever-tightening embrace of the US and India, the preponderance of the US in the Middle East can perilously affect Pakistan’s national interests. The overwhelming presence of the US Fifth Fleet in Bahrain and American military base, Al Udeid Air Base, in Qatar can be used against Pakistan in case the US and its allies grasp the control of the Strait. Pakistan should keep a wary eye on these developments.

Since Pakistan is enjoying impressively warm relations with the Gulf States, which are also close allies of the US, it can play a pivotal role in convincing the Arab allies to secure Pakistan’s strategic and economic interests in case of any high-risk situation turns out.

The Strait of Hormuz also plays a significant role for Pakistan’s energy needs as it is the sole passage through which Pakistan receives oil from Saudi Arabia, which is a primary oil market for Pakistan. Saudi Arabia is the only state which sells oil to Pakistan on deferred payments which account for $275 million (500) a month. These supplies are to be continued for next three years making its total worth around $9.9 billion. Likewise, Saudi Arabia has also announced a much-needed economic support package of $3 billion for Pakistan. These privileges will not be enjoyed if the Strait is sealed off. It will be nothing short of an existential threat to Pakistan that is at the threshold of economic collapse.

Another bitter harvest of the Strait crisis will be an unimaginable boost in the petroleum smuggling from Iranian porous border areas, which have lately been hotbeds of extremism and anti-state activities. Since the US has been withdrawn from the Iran nuclear deal, there is, however, a marked possibility that other illegal channels will be explored to sell oil abroad. It will inflict an irreparable loss on the national exchequer as well. The incumbent government must take appropriate measures in an efficient manner to thwart these impending threats.

China, being one of the highest consumers of oil in Asia, must be timely convinced that smooth flowing of oil in the Gulf is in its long-term national interests. Once China is made sure that its ‘Malacca Dilemma’ can only be addressed through the smooth passage of oil from the Strait of Hormouz, it will surely play a decisive role. While Pakistan, to bypass the Strait of Hormouz if in emergency, can devise a mechanism to link Pakistan with China National Petroleum Corporation’s first-ever oil pipeline that starts from Kazakhstan to China. Pakistan must take part in China’s new plans of constructing pipelines that will join the Iran’s oilfields in the southwest to the Caspian sea from where the oil will be transferred to mainland China.

In order to avert the simmering crisis in the Gulf, Pakistan must consolidate its bilateral ties with the Gulf states, notably Saudi Arabia and the UAE. Saudi Arabia has constructed two crucial pipelines: the East-West Pipeline and the Abqaiq-Yanbu Natural Gas Liquids Pipeline. Likewise, the UAE has successfully installed the Abu Dhabi Crude Oil Pipeline which, like the two pipelines of Saudi Arabia, bypass the sensitive Strait of Hormouz. Pakistan should explore avenues in these two states for future engagement on oil security.

Since the US has been withdrawn from the Iran nuclear deal, there is, however, a marked possibility that other illegal channels will be explored to sell oil abroad. It will inflict an irreparable loss on the national exchequer as well

Closure of the Strait of Hormouz will be a watershed moment in the history of the modern world as it may bring chaos in the entire world. Oil prices will rise and insurance cost will soar to an unprecedented height. There is a distinctive possibility that the world will witness an economic recession.

Pakistan must visualize this emerging Gulf crisis from the Indian lens. India has, hazardously, invested a great chunk of finance in its maritime security. Indian inspirations to seek the privilege of “Blue Navy” have heavily tilted the balance of power in Indian basket. Indian investment in Iranian Chabahar port and, capturing a slot as a member of the Quadrilateral Security Dialogue (QUAD) – a military and diplomatic group of Australia, Japan, India, and the US – has vindicated the opinions that India was seeking to jeopardize Pakistan’s naval interests.

In a nutshell, it a ripe time that Pakistan invests heavily in its ‘Blue Economy’ and ‘Maritime Security’. There is an apparent opportunity of oil trade by constructing an oil pipeline through Afghanistan to Central Asia starting from Chaman, Balochistan. Pakistan, however, must support the Afghan peace process in both letter and spirit as peaceful Afghanistan will ensure our energy security as well. Pakistan must not look for the Red Sea option as it is not only expensive, but also ships need to pass through the Bab-el-Mandeb, which is equally a risky adventure due to the prolonged civil war in Yemen. Pakistan, however, can mitigate its woes by installing maximum oil refineries in Gwadar, so it can become independent in transforming the crude oil in other useful petroleum products. Constructing under-sea pipelines will not be economically viable. Instead, Pakistan should buy its own oil ships in case insurance prices go high, it can tackle these issues. If the volcano of the Strait of Hormuz does not calm down, its lava would engulf the entire world, and Pakistan will be the first vulnerable victim.

The writer is a Research Officer at the Islamabad Policy Institute (IPI).


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