By Joe Petrowski
With tension rising between Iran and the West, it is important to remember that only 18 million barrels/day out of a world consumption of 99 million barrels/day pass through the Strait of Hormuz. Any long-term disruption (unlikely) would threaten 18 million barrels/day, or 19% of world exports, and probably instigate a $20/barrel rise in prices (assuming no lasting damage to any of the oil fields in the region).
However, the Saudi’s have five other export ports in their western provinces relying on Red Sea and not Hormuz for international access: Dhiba, Jizan, Yanbu, Jeddah, and Jubail. So while the strait is important petroleum will still flow, and any price rise of $20/barrel will increase non-Mideast supply by as much as 15 million barrels/day dampening any price spike.
Joe Petrowski has had a long career in international commodity trading, energy and retail management and public policy development. He currently serves as Director of Fuels for Yesway, where he oversees all operations of the fuels team, including pricing, procurement, and management of the firm’s fleet services program. In 2005, he was named President and CEO of Gulf Oil LP and elected to the Gulf Oil LP Board of Directors. In October of 2008, he was named CEO of the now combined Gulf Oil and Cumberland Farms, whose annual revenues exceed $11 billion and that now operates in 27 states. In September 2013, Petrowski stepped down as CEO of The Cumberland Gulf Group. He is Managing Director of Mercantor Partners, a private equity firm investing in convenience and energy distribution, and a member of the Gulf Board.