EXPLAINER-What is the Strait of Hormuz and why is it so critical to the world?

April 17 (Reuters) - Iran's foreign minister said the Strait of Hormuz was open for all commercial vessels for the remainder of the U.S.-brokered 10-day ceasefire between Israel and Iran-backed Hezbollah, prompting a sharp fall in the price of oil.

A senior Iranian official said all vessels, except for naval ships, would be able to sail through the strait but their plans needed to be coordinated with Iran’s Revolutionary Guards and ships transiting would be restricted to lanes Iran deemed safe.

The U.S.-Israeli war with Iran, which began on February 28, has killed thousands of people, destabilised the Middle East and rocked global energy markets by effectively closing the strait.

Below are details on the strait and its importance:

WHAT IS THE STRAIT OF HORMUZ?

Lying between Oman and Iran and linking the Gulf north of it with the Gulf of Oman to the south and the Arabian Sea beyond, the strait is 21 miles (33 km) wide at its narrowest point, with a shipping lane just 2 miles (3 km) wide in either direction.

Perhaps the world's most important energy shipping channel, the waterway is about 104 miles (167 km) long.

Following through on an old threat, Tehran effectively closed the strait after U.S.-Israeli strikes on Iran began on February 28. During the standoff over the strait, Iran threatened to charge fees on ships passing through.

No such unilateral move to demand fees to traverse a strait has been made in modern history, shipping industry officials said, while U.S. President Donald Trump has said free traffic of oil through the strait must be part of any peace deal.

WHY IT MATTERS FOR OIL, GAS, JET FUEL AND FERTILISERS

About a fifth of the world's oil and liquefied natural gas (LNG) supplies normally pass through the strait, which is the only sea exit for the fuels from key exporting countries.

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the waterway.

Qatar, among the world's biggest liquefied natural gas exporters, sends almost all of its LNG through the strait, while analytics firm Kpler estimates about 33% of the world’s fertilisers, including sulphur and ammonia, pass via the strait.

Traffic has dropped by 97% since the U.S.-Israeli war against Iran began on February 28, United Nations data shows.

LONG HISTORY OF TENSIONS OVER THE STRAIT

When a commander in Iran's Islamic Revolutionary Guard Corps warned in 2011 that cutting off the strait would be "easier than drinking a glass of water", the threat to the strait had already been made many times before.

During the 1980 to 1988 Iran-Iraq War, the two sides sought to disrupt each other's exports in what was called the Tanker War.

And in January 2012, Iran threatened to block the strait in retaliation for U.S. and European sanctions. In May 2019, four vessels - including two Saudi oil tankers - were attacked off the UAE coast, outside the Strait of Hormuz.

Three vessels, two in 2023 and one in 2024, were seized by Iran near or in the strait. Some of the seizures followed U.S. seizures of tankers related to Iran.

Last year, Iran considered shutting down the strait after U.S. attacks on its nuclear facilities.

But analysts had always regarded the closure of the strait as a measure of last resort because of the long-term strategic changes it might prompt among Iran's enemies, and the potential for retaliation against its own energy sector.

WHY IS THE STRAIT SO HARD TO SECURE?

The shipping lanes are narrow and ships must make a turn opposite Iranian islands and a mountainous coast that provides cover for Iranian forces, shipping broker SSY Global said.

Although Iran's navy has largely been destroyed, the Islamic Revolutionary Guard Corps has options including fast attack craft, mini submarines, mines and even jetskis packed with explosives, said Tom Sharpe, a retired Royal Navy commander.

And Tehran has the capacity to produce around 10,000 drones a month, according to the Centre for Information Resilience.

ARE THERE ANY ALTERNATIVES TO THE STRAIT?

The UAE and Saudi Arabia have sought to find ways to bypass the strait by building more oil pipelines.

But those are not currently operational and an attack on an east-west Saudi pipeline by Houthi militia in 2019 showed those alternatives were also vulnerable.

Qatar's foreign ministry said all countries in the region have the right to use the strait freely and any talks on future financial mechanisms should wait until after it is reopened.

While the strait has been closed, shipping firms have had to find alternative routes for some basic goods. For example, ensuring a shipment of timber reached Qatar required rerouting overland through the UAE.

WHAT DOES INTERNATIONAL LAW SAY?

The UNCLOS maritime convention governing international sea law, which was adopted in 1982 and has been in force since 1994, says states bordering straits cannot demand payment simply for permission to pass through.

However, they can impose limited fees on ships for services such as piloting, tugging or port services, though these may not be levied more heavily on vessels from any particular countries.

Article 38 of the UN Convention on the Law of the Sea, sometimes known as UNCLOS, provides vessels a right of unimpeded "transit passage" through more than 100 straits worldwide, including the Strait of Hormuz.

Around 170 countries and the European Union have ratified UNCLOS. But Iran and the United States have not.

This raises the question of whether the treaty's rules affording freedom of maritime navigation have become part of customary international law, or bind only ratifying countries.