NPR.

This is the indicator from Planet Money. I'm Daryam Woods.

And I'm Patty Hirsch.

Right now, following US strikes against Iran, perhaps the most watched corner of the world,

is a strip of water about 100 miles long and just 24 miles wide at its narrowest point.

It's called the Strait of Hormuz, and it's the gateway to the otherwise landlocked Persian Gulf.

It is important because roughly a quarter of the oil shipped in the world,

and a fifth of all the liquefied natural gas passes through this choke point, the northern bank of which is part of the Republic of Iran.

Part of Iran's response to the bombing of its nuclear facilities was a vote in the Iranian parliament over the weekend to close the Strait of Hormuz, though a final

decision would lie with Iran's national security council. Iran has threatened to shut the

straight down in the past, and while it has never actually done so, a lot of people are worried

that this time could be different. On today's show, we'll learn why the Strait of Hormuz has become such an important pressure point in geopolitics,

and whether Iran could indeed close it off and throttle the supply of oil to the rest of the world.

We'll also find out how the most important indicator of what might happen in the strait could be the insurance industry.

That's coming up after the break.

The Strait of Hormuz has been pivotal to trade in the Middle East for millennia, but it took

on global importance after the Second World War. That's when companies began drilling and extracting oil from the region in earnest

and shipping it around the world.

And back then, pretty much every drop of the black stuff went through the Strait of All Moose.

That is a route you have to take to transport oil from a number of Middle Eastern countries to their global destinations.

Elizabeth Braw leads the Maritime Threats Initiative at the Atlantic Council, a think tank.

If you can't go through the straight of a moose, you cannot choose another route.

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