Several different industries work together to satisfy global demand for oil, ranging from companies that explore and drill for oil to retailers that sell gas to motorists. Each would react in its own way to a disruption in the Strait of Hormuz. When business conditions change, firms don't surrender. They adapt.
Companies that pump oil out of the ground around the world (producers), transport oil in ships from producers to consumers (tanker owners), and indemnify the oil trade against in-transit losses (maritime insurers) would face the most immediate need to adapt to attacks on shipping in the Strait of Hormuz. To understand how a disruption would affect the global economy — and how big a disruption would need to be to threaten global prosperity — we need to understand how the market works in each of these industries.
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This page last modified in August 2008