00:00The status of the Strait of Hormuz has changed, perhaps forever.
00:03To show you why and how that matters, I need a different map and I need a larger desk.
00:09Okay, we have a larger desk and now let me get the proper chart.
00:13This is a nautical chart, industry standard UK Almirati.
00:18If you were on the bridge of one of the oil tankers inside the Persian Gulf,
00:23probably you will be looking exactly at this map.
00:27Persian Gulf and the Strait of Hormuz is critical for global energy supply.
00:31Around 20% of the world's oil comes through the Strait of Hormuz.
00:35Around 25% of the world's LNG, liquefied natural gas, also comes through the Strait of Hormuz.
00:41Let me show you why it's critical and how narrow it is at the narrowest point, which is here.
00:47We have Iran to the north, Oman to the south.
00:54And although the Strait looks a bit wider, in reality what matters is this area here.
01:01This is the traffic separation scheme, sort of a highway inside the sea.
01:07This is the lane that goes into the Persian Gulf.
01:12This is the lane that comes out of the Persian Gulf.
01:17And in between is a buffer area, which is shaded.
01:21Each of these lanes is about two miles wide.
01:24It is very, very narrow at that point.
01:28And now the United States and Iran are fighting for who and how that's going to be controlled.
01:35Since the beginning of the war, the Strait has been closed.
01:38And on social media, the Iranian Supreme Leader Ayatollah Khamenei and the President of the United States, Donald Trump, are
01:45fighting about what's going to happen next.
01:48My belief is that the status of the Strait will change during the negotiations.
01:54Because at the moment, very little is flowing to the Strait.
01:58And the Iranians are suggesting that things need to change immediately.
02:03They have distributed this map.
02:05Sorry, they have issue only on black and white.
02:09It shows here, it's a close-up of the area that I was showing you earlier.
02:14This area here is what I have now magnified on the screen.
02:18Oman is here.
02:20This is the Iranian coast.
02:24And all shipping lanes are here, in blue, in and out.
02:30What the Iranians are telling the industry is that this area should not be used.
02:36Because there is danger.
02:37They have been planting anti-ship mines and therefore it needs to be avoided.
02:44What they are suggesting instead is a new area of shipping lanes to the north and a lot closer to
02:51the Iranian coast.
02:52One lane to get out and one lane to come into the Persian Gulf.
02:58It comes remarkably close to the Iranian coast, very close around Larrak Island.
03:04Which for many in the industry could become a new kind of control point for the Iranians to exert more
03:11influence on this Strait.
03:14The crucial point here is that this whole area that has been in use for 50 years was fully inside
03:23Omani territorial waters.
03:25This new area that the Iranians are suggesting is full in Iranian territorial waters.
03:32And that really matters because what we are seeing at the moment, if I go to my Bloomberg screen, is
03:40that very little is moving.
03:42Some Iranian ships have crossed over the last few days, but more ships remain at anchor inside the Persian Gulf.
03:50All of them, but this small group here, these are mostly Chinese flag oil tankers.
03:57And they came from inside the Persian Gulf, they have congregated in this area, they have dropped anchor, and they
04:03seem to be waiting for something to happen, probably prepared to cross.
04:07The challenge now is how to square the circle over the Strait of Hormuz, how to allow that both the
04:13United States and Iran say that they got what they wanted, and how to go from this new situation to
04:19the old one.
04:20That will be coming through diplomacy, through negotiation, but I don't think that we will ever see the Strait of
04:27Hormuz exactly as it was before the war, but perhaps not as controlled as it is by now by Iran.
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