Mujtaba Khamenei and Donald Trump
America has started the blockade of Iran’s ports. American ships are arriving around Hormuz. President Donald Trump warned that if any Iranian ship came near, it would be immediately destroyed. Due to this blockade being done by America, Iran may suffer a loss of about 435 million dollars i.e. about 40 thousand crores in trade every day. This blockade will apply to ships of all countries visiting Iran’s ports and coastal areas, including the Arabian Gulf and the Gulf of Oman. However, the US will not stop ships going to non-Iranian ports through the Strait of Hormuz.
According to Miyad Maleki, senior expert of the foreign policy institute FDD, the economic impact on Iran could be immediate and huge. He wrote in a long post on
Iran’s trade dependence
More than 90% of Iran’s annual trade, valued at about $109.7 billion, passes through the Persian Gulf. 80% of export earnings and about a quarter of the country’s total GDP come from oil and gas. Maleki said that Iran is exporting about 1.5 million barrels of crude oil every day, which generates an income of about 139 million dollars every day at war-like high prices. He said that this work will stop immediately due to the blockade and said that Kharg Island, which handles 92% of crude oil export, falls in this affected area.
Petrochemicals will also be affected
Oil related chemicals i.e. petrochemical exports will also be affected by this blockade. Iran’s exports worth about $54 million per day will be affected because these goods are sent from ports that are in the blockade area. Those ports include Asluyeh and Imam Khomeini Port.
Impact on non-oil exports
Non-oil exports worth about $88 million daily will also be affected, as about 90% of goods pass through Gulf ports. According to the analysis, Iran has very few options outside the Strait of Hormuz. Ports like Jask and Chabahar operate at much lower capacity than the larger Gulf ports, which handle most of the country’s trade. Iran’s oil storage capacity may provide only short-term relief. With approximately 20 million barrels of spare capacity and continuous production, this storage could be filled in about 13 days, after which the oil wells may have to be shut down.
Maleki warned that closing old oil fields could cause permanent damage. He said that due to forced closure, 300,000 to 500,000 barrels of production capacity per day could be lost forever, which means there could be a loss of $ 9-15 billion annually.
Also read- Impact of Hormuz tension on Indian companies, big decline in business in Middle East
