> Much of that domestic consumption is used in the process of extraction and refining, so actually isn't on the market as such. My understanding is that GP is correct to say that the 20% figure rather understates the potential impact of a prolonged shutdown of the Strait.
The original claim was that all of the "domestic" oil was off the market.
It's also not clear why oil used for oil production requires special treatment. To the extent that it's used for transportation it's susceptible to substitution with electric vehicles like anything else. To the extent that it's used for heat in refineries it could likewise be substituted with non-petroleum heat sources when oil is at a premium. More than that, many of those costs also apply to unrefined oil currently going through the Strait, so that proportion is on both sides of the ledger anyway.
And to the extent that it can't be substituted, it's just a fairly arbitrary subclass of the broader category of consumers with inelastic demand, which implies that oil-producing countries might have a higher percentage of inelastic demand (even then assuming that oil production has more inelastic demand for oil than other things), but by significantly less than the proportion used in oil production, because it's just being averaged in to the broader category of all short-term inelastic global oil consumption.
> Pipeline capacity to the west is pretty limited. The connection via Syria is affected by the war aftermath, the Iraq/Turkey route is already at capacity, and the Saudi connection to the Red Sea is vulnerable to resumption of Houthi attacks. There's some connectivity via Oman, but that's largely natural gas rather than oil.
Pipelines are the most efficient way to transport it, not the only way. You import some tanker trucks and drivers and you can transport as much as you want, but it'll cost more. We're not even talking about thousands of miles, bypassing the Strait of Hormuz via a land path in the UAE is about an hour.
And the Houthis are a problem if you're trying to get to Asia, not Europe. The Saudi pipeline goes to the Red Sea well north of Yemen and from there has a sea path to Europe via the Suez canal.
On top of that, the Iranian military is already in a full conflict with the US. Whereas if the US parks an aircraft carrier with satellite support in the narrow part of the Red Sea ready to rain down fire on any Houthis that attack an oil tanker, but is otherwise going to leave them alone, how many do they have who are inclined to choose certain death to attack a ship most likely destined for Asia out of "solidarity"?