Talk of conflict in Hormuz is a red herring for oil market

Talk of conflict in the Strait of Hormuz misses the real threat to the global oil market

Iran's threat to close the narrow body of water that connects the Mideast Gulf with the global oil market is neither credible, nor the worst possible outcome of rising tensions between the country and its Western enemies. The Strait of Hormuz is certainly a critical “artery of global trade”, as UK defence minister Philip Hammond said in London today. About a fifth of the world’s oil flows from exporters in the Middle East through the Strait. Shutting it down would trigger an immediate oil-price spike. Depending on the duration of the shut-in, $150 a barrel oil would be just the starting point. (Brent crude futures have risen by 4.6% since the start of the year, to $112/b.) That’s why any att