Important but fragile parts of the world

We live in a world that is quite complex with a lot of moving parts. The global economy is a very large machine that touches almost every corner of the globe in some way. However, this constant moving and trading of the global economy and thus, our ways of life have some very fragile points. I will touch on two of these geographical points in this post that are relatively small in physical size but are mammoth sized in importance to our daily lives. They are the Strait of Hormuz and the Bosphorus Strait. These narrow waterways are crucial because of their use as passage ways for a big chunk of the crude oil that is shipped.

The Strait of Hormuz is situated between Iran, to the north and Oman, to the south (the UAE is also in that southern part). It is quite possibly the most important strategic piece of geography in the world as about 40% of the world’s oil supply goes through this stretch of water (at times it is even higher than 40% with some estimates as high as 60%). That in itself makes it vital. However, because a part of this waterway is actually a part of Iran and in the heart of the Middle East, it makes this trade artery very fragile to disruption.

Map of the Strait of Hormuz

Although it would be suicidal for its own economy, there is a lingering fear that Iran would intentionally disrupt the traffic flow in the Strait of Hormuz to cause chaos for its American and European adversaries. A terrorist attack with the same result is also a big fear and this would also likely come from Iranian affiliates or sympathizers or perhaps from a group like Al Qaeda. Either way, this type of disruption would cause oil prices to sky rocket overnight and could even cause war to break out in the region.

The Bosphorus is also important for its oil flow, even though not as much oil is shipped through it. This strait is used among other nations, by Russia and former Soviet states to transport oil exports. It is considered to be an international waterway but, Turkey holds certain environmental and very limited traffic rights to it (since it is part of its territory). This strait is vital because the traffic in this strait, mainly due to increased oil exports from Azerbaijan, Kazakhstan and Russia is expected to increase substantially in the future. The problem is that this strait is the narrowest in the world that is used for international navigation and some say that it is already close to overcapacity in terms of traffic.

The Bosphorus Strait connects the Black Sea (Russia) to the Sea of Marmara, which connects to the Mediterranean Sea.

The Bosphorus Strait connects the Black Sea (Russia) to the Sea of Marmara, which connects to the Mediterranean Sea.

This means that the chance of a collision will be higher and in the event that a collision between oil tankers occurs, it may very well halt all traffic in this narrow waterway. This will also cause oil prices to spike and can even make less developed nations that rely on the oil imports from there to have shortages. Also, one of Russia’s largest oil export competitors is Iran and by causing a terrorist attack in this strait, it will surely yield the best bang for the buck for them in terms of crippling their supply route. This last point is not an imminent risk because right now the last thing Iran needs is more enemies, but in the future this might be a possibility. Other groups or countries that might have a desire to harm the Russian and/or global economy would also see the relative ease in causing serious problems in the global oil supply by looking at the Bosphorus.

The reason this is important to you is so that you have a better understanding of how certain parts of world geography are crucial to our daily lives and also how fragile they are. Now when you hear something about these two parts of the world and the news is negative, you will be able to predict the jumping of oil prices the following day. Also these two geographic points illustrate how important Iran is in the world sphere and why it is so important that their influence, ability and most importantly, their leadership and aspirations become A LOT more innocent and cooperative.