Maritime Routing Model Methodology, Calculations & Chokepoint Parameters
The Strait of Hormuz Chokepoint
The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is the world's most critical petroleum transit chokepoint, handling approximately 20.5 to 21.0 million barrels per day (Mbpd) of crude oil and petroleum products—representing approximately 20% of global liquid petroleum consumption and over 25% of all seaborne crude trade.
Unlike the Suez Canal or Panama Canal, there are limited maritime bypass routes for Persian Gulf producers (Saudi Arabia, UAE, Iraq, Kuwait, Qatar, and Iran). Only two pipelines bypass Hormuz: the 1,200 km Saudi East-West Petroline (capacity ~5.0 Mbpd, terminating at Yanbu on the Red Sea) and the UAE Abu Dhabi Crude Oil Pipeline (capacity ~1.5 Mbpd, terminating at Fujairah on the Indian Ocean).
Freight Ton-Mile & Price Premium Equations
Ton-Mile Demand: Calculated as cargo volume (metric tons) multiplied by nautical miles traveled. Rerouting a Very Large Crude Carrier (VLCC carrying 2 million barrels) from Ras Tanura to Rotterdam via the Cape of Good Hope increases distance from ~6,400 nm (via Suez) or ~11,200 nm to ~12,400 nm, consuming an additional 14 to 22 sailing days depending on cruising knots (12.5–14.0 kts).
Landed Cost Premium ($/bbl):
ΔCost = (ΔDays × VLCC_Dayrate + ΔBunker_Tons × Fuel_Price + Vessel_Value × Hull_War_Risk_Rate) / 2,000,000 bbls.
When Hormuz transit is curtailed, excess charter competition surges global fleet utilization past 92%, escalating freight dayrates and Brent spot crack spreads.