There are 4 key hinge points for oil

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While everyone was watching the Strait of Hormuz in the midst of growing tensions between the United States and Iran, a strangling point on the other side of the peninsula Arabic is now central to the action.

Saudi Arabia temporarily suspended all oil shipments across the Bab al-Mandeb Strait after Saudi Aramco reported Houthi rebel attacks on two oil tankers. The two vessels in question were very large crude oil carriers (VLCCs), each carrying 1 million barrels of oil, and one of them suffered minor damages. The Houthis said they had the naval ability to hit Saudi ports and other targets in the Red Sea, according to Reuters.

In response, the Saudi energy minister suspended oil shipments across the strait. "Saudi Arabia temporarily suspends all oil shipments across the Bab al-Mandeb Strait until the situation becomes clearer and maritime transit via Bab al-Mandeb is safe," he said. Khalid al-Falih. The Kuwait Oil Tanker Company said that it could also suspend the flow of tankers through the narrow chokepoint.

The sudden risk for two of the world's most critical chokepoints pushed oil prices up a bit this week, though serious failures have not yet materialized.

Nearly two-thirds of the world's oil trade is by sea. Here is a quick overview of the best global anchors for the oil trade.

1. Strait of Ormuz. The world's largest chokepoint sees nearly 19 million barrels per day (mb / d) of oil traffic, according to the EIA. At its narrowest point, Hormuz is only 21 miles wide. Through this narrow passage, oil exports from Iraq, Iran, Kuwait, Bahrain, Qatar (including significant volumes of LNG exports), UAE and Saudi Arabia must pass. The US Navy patrols the area because of its strategic importance. Iran has threatened to disrupt oil traffic across the strait, but for now, the market assumes everything is swaggering.

2. Strait of Malacca. The Strait of Malacca, between Indonesia and Malaysia, was the second largest chokepoint in terms of oil volume, with 16 mb / d of oil in 2016. The strait connects the Indian and Pacific Oceans and is the main route of access. Middle East oil to reach Asian markets. The Strait is only 1.7 miles wide at its narrowest point, "creating a natural bottleneck with the potential for collisions, strandings, or oil spills. According to the EIA. China, the largest oil importer in the world, has a strategic interest in seeing tanker traffic continuously cross the strait.

3. Suez Canal and SUMED pipeline. Located in Egypt, the Suez Canal is another crucial chokepoint. Combined with the SUMED pipeline, which bypasses the canal and connects the Mediterranean with the Red Sea, both roads account for about 9% of the world's oil per day, or 5.5 mb / d. Most of the oil goes north, from the Middle East to Europe. The Suez Canal can not accommodate larger oil tankers, ULVs, and can only handle VLCCs that are not fully loaded. Thus, VLCCs can unload some of their cargo on the SUMED pipeline, and then the lighter vessel can cross the canal, picking up oil at the other end of the pipeline in the Mediterranean. The SUMED pipeline can carry 2.34 Mb / d and offers some sort of protection against a Suez Canal failure.

4. Bab el-Mandeb. The Bab el-Mandeb Strait is a narrow passageway between the Horn of Africa and the Middle East (between Djibouti and Yemen, more precisely). It connects the Red Sea and the Gulf of Aden, or more broadly, it is the link between the Mediterranean and the Indian Ocean. This chokepoint saw just under 5 mb / d of oil traffic in 2016, but its importance is magnified for two reasons. First, most of the oil that must pass through the Suez Canal / SUMED pipeline must first pass through Bab el-Mandeb. Oil tankers therefore have multiple obstacles on this route between the Middle East and Europe. Secondly, it is, at this stage, close to the war in Yemen.

There are a series of other smaller chokepoints, but these four are the most important in terms of trade size and because of risk. A breakdown at one of these locations, even for a short period of time, could result in a sharp rise in oil prices, the effects being magnified by the size and duration of the outage. Even the smell of a potential failure, especially when the oil market is tight, can add a few dollars per barrel as risk premium.