A freight transportation analyst is warning escalating tensions between Iran and the United States over the Strait of Hormuz could undermine global supply chains in the near term and shipping development in the Middle East in the long term.
London-based Transport Intelligence noted in a report Wednesday the strait not only is a transit point for large numbers of oil tankers and container ships, but that Dubai, the world's ninth-largest port, sits adjacent to the waters.
"Of more immediate concern to supply chains will be the impact of the war of words on global oil markets," John Manners-Bell said in a briefing report by the trade and transportation analysts.
"The possibility of the closure of the strait, which acts as a transit for 17 million barrels of oil a day, has been a factor in the rising oil price over recent weeks, despite the weak economic environment. The last thing at the moment that the world's fragile economy needs is a new confrontation in the Middle East.
The United States has deployed an aircraft carrier into the region as part of the U.S. and EU stated goal of blocking Iran's oil exports under sanctions imposed as a result of Iran's nuclear program. So far, there has been only sharp rhetoric flying between the countries, but Manners-Bell said full military conflict could have a far-reaching impact.
"A long-running dispute could undermine confidence in further development plans in the region," he said. "For example, late in 2011, work started on a New Doha Port in Qatar which on completion in 2030 would be able to handle 6 million 20-foot equivalent unit containers."
Roughly 30 percent of the world's oil supply passed through the Strait of Hormuz in 2011, according to The Christian Science Monitor.
Oil prices on world markets on Tuesday jumped $4 a barrel to $102.96 on the New York Mercantile Exchange as tensions mounted. As of early afternoon in Europe, prices fell 82 cents to $102.14 a barrel in electronic trading on the exchange, according to the Associated Press.