NEW DELHI: Asian countries are the most at risk from oil and gas supply disruptions in the Strait of Hormuz, with Japan facing the highest risk, followed by South Korea and India, according to international research group Zero Carbon Analytics.
The Strait of Hormuz lies between Iran and Oman on the Arabian Peninsula and connects the Persian Gulf with the Arabian Sea. The shipping lanes in the strait are only two miles wide in each direction, but around 20 per cent of the world's oil and liquified natural gas (LNG) flows through them. The narrow chokepoint is the main route for oil exported from major Middle-East producers, including Saudi Arabia, Iraq and Iran, and the only route for LNG from Qatar and the United Arab Emirates (UAE) to enter global markets.
"Around 20 per cent of the world's oil and LNG passes through the two-mile-wide shipping lanes in the Strait of Hormuz, making it a major chokepoint in global energy supply. Iran may disrupt or block the shipping route. Four Asian countries -- China, India, Japan and South Korea -- account for 75 per cent of oil and 59 per cent of LNG flows through the strait. China and India are the largest single destinations for oil and LNG travelling through the strait," the research group said.
"Of the top countries that import oil and gas via the Strait of Hormuz, Japan faces the most direct risk of disruption, due to its high share of oil and gas trade through the shipping route and its reliance on imported oil and gas. South Korea ranks second most at risk, India third and China fourth," it added.
While China and India are the largest single destinations for the oil and LNG travelling through the strait, Japan and South Korea are far more vulnerable to supply shocks.
According to an analysis by Ember, a global energy think tank, 87 per cent of Japan's and 81 per cent of South Korea's total energy usage comes from imported fossil fuels, compared to 20 per cent for China and 35 per cent for India.
Both Japan and South Korea are also heavily reliant on oil and gas, which account for 71 per cent and 78 per cent of their fossil-fuel imports, respectively. Japan's high reliance on fossil-fuel imports has the potential to undermine its national-security strategy, which seeks to "ensure the self-reliance of its economic structure".
"Taiwan is also heavily exposed as it is entirely reliant on imported gas and one-third of its LNG travels through the strait. While it does produce some gas domestically, Pakistan is in a similar position," said Anne-Sophie Corbeau of the Centre on Global Energy Policy at the Columbia University.