Hormuz Under Siege: Iran's Exclusion Zone Hampers Global Trade

The Strait of Hormuz has become increasingly strained following Iran's announcement of a new maritime 'exclusion zone' or 'restricted zone' in the Persian Gulf.

The exclusion zone will begin at the borders of the American blockade of Iranian ports and extend to parts of the Gulf, effectively placing any vessel entering the zone on Iran’s sanctions list.

The Strait of Hormuz is a vital trade route for oil and liquefied natural gas (LNG), with around one-fifth of global LNG supplies passing through it. The volume of LNG transported through the strait has already fallen by 92 percent since the conflict intensified, with more than 300 LNG cargoes from Qatar and around 20 from the UAE unable to be delivered.

The decline in transit is affecting countries worldwide, including India, which has seen its LPG imports from the Persian Gulf decrease by 40 percent. Europe is also feeling the impact, with the EU entering the winter season with its lowest gas storage level in 15 years at 65.6 percent.