The U.S. Energy Information Administration recently unveiled its 2017 World Oil Transit Chokepoints report. Chokepoints are narrow channels along widely used global sea routes for oil transport, with some so narrow that restrictions are placed on the size of the vessel that can navigate through them.
The inability of oil tankers to transit a major chokepoint can lead to substantial supply delays and higher shipping costs, resulting in higher energy prices throughout the world. While most chokepoints can be circumvented by using other routes, they add significant time to the journey. Chokepoints may also expose oil tankers to theft from pirates, terrorist attacks, and shipping accidents.
By volume of oil transit, the leading global ports are:
- The Strait of Hormuz (leading out of the Persian Gulf) – 18.5 million barrels/day.
- The Strait of Malacca which runs through Indonesia, Malaysia and Singapore in linking the Indian Ocean and South China Sea through to the Pacific Ocean – 16 million b/d.
- The Cape of Good Hope, near the southern tip of Africa. It’s a primary alternative route for larger ships looking to avoid chokepoints. – 5.8 million b/d.
- Egypt’s Suez Canal – 5.5 million b/d.
- The Bab el-Mandeb Strait between the Horn of Africa and the Middle East, linking the Mediterranean Sea and the Indian Ocean – 4.8 million b/d.
- The Danish Straits, which are a series of channels that connect the Baltic Sea to the North Sea. They are an important route for Russian oil exports to Europe – 3.2 million b/d.
- The Turkish Straits, which includes the Bosporus and Dardanelles waterways that divide Asia from Europe. This passage connects the Black Sea with the Sea of Marmara and into the Mediterranean in supplying Western and Southern Europe with oil from Russia – 2.4 million b/d.
- Although it’s a vital passageway for a number of goods, the Panama Canal is not a major throughway for petroleum products or crude oil. Connecting the Pacific Ocean with the Caribbean Sea and the Atlantic Ocean, about 900,000 b/d passed through the canal last year.
Some chokepoints, such as the Strait of Hormuz, are deep enough and wide enough to accommodate all sizes of vessels. However, ships transiting the Panama and Suez canals are subject to depth and width restrictions. Tanker traffic through the Bab el-Mandeb and Turkish straits do not face specific size restrictions, but they must deal with relatively narrow, difficult-to-navigate sea lanes.
Insights
All of these potential shipping challenges seem to bring the focus back to a dependence on middle eastern shipping ports that are best suited for the larger ships preferred for transporting oil. The costs, security concerns, and timeliness of alternative shipping routes also reinforce the value of exploring U.S.-based energy resources and developing non-fossil fuel alternatives.