The Strait of Hormuz, a narrow waterway in the Middle East that marks the most sensitive transportation choke point for global oil supplies, was back in focus Friday after a U.S. airstrike killed a top Iranian military commander and heightened fears of a confrontation between the two countries.

Read:What stock-market investors need to know about intensifying U.S.-Iran tensions

A U.S. airstrike at Baghdad’s airport killed Qassem Soleimani, leader of the foreign wing of Iran’s Islamic Revolutionary Guard Corps. The Pentagon said President Donald Trump ordered the strike in a defensive action, alleging that Soleimani had planned to direct attacks on U.S. diplomats and service members in the region. Iran’s supreme leader, Ayatollah Ali Khamenei, has promised “harsh revenge” for Soleimani’s death.

Over the weekend, Iraq’s parliament passed a draft bill to expel U.S. troops from the country, while Iran said it would no longer abide by the limits contained in the 2015 nuclear deal.

Trump, in response, threatened Iraq with sanctions if it moves to remove U.S. troops. As for Iran, he also repeated a threat to target 52 sites for retaliation if Iran strikes back. Trumps said those sites some that he described as being of “cultural” significance, while dismissing warnings that targeting cultural sites could be considered a war crime under international laws.

Read:Who was Qassem Soleimani, and why is his death a major development in U.S.-Middle East relations?

Oil prices jumped Friday, with West Texas Intermediate crude US:CLG20, the U.S. benchmark, rising to an eight-month high, and Brent crude UK:BRNH20, the global benchmark, trading at its highest level since September when an attack on Saudi Arabia’s oil infrastructure, widely blamed on Iran, temporarily knocked half of the country’s output offline. Oil extended gains on Monday, with Brent touching $70 a barrel.

Global stocks sold off Friday with the Dow Jones Industrial Average DJIA, -0.49% dropping more than 300 points in early action, but trimming losses by the closing bell. Stocks were under renewed pressure Monday, with the Dow off 128 points, or 0.4%, in early action, while the S&P 500 SPX, -0.92% declined 0.3%.

Iran is widely expected to retaliate, and analysts see the potential for renewed attacks on the waterway off the country’s southern coast. Attacks on ships around the strait last year caused temporary jumps in crude oil prices.

Here’s a look at the Strait of Hormuz and why it’s a key concern for oil traders:

Where is the Strait of Hormuz?

The Strait of Hormuz is a narrow waterway that links the Persian Gulf with the Gulf of Oman and the Arabian Sea.

At its narrowest point, the waterway is only 21 miles wide, and the width of the shipping lane in either direction is just 2 miles, separated by a 2-mile buffer zone.

Why is it important?

Oil tankers carrying crude from ports on the Persian Gulf must pass through the strait. Around 21 million barrels of oil a day flowed through it in 2018, equivalent to roughly a third of global seaborne oil trade and about 21% of global petroleum liquids consumption, the U.S. Energy Information Administration said in June.

Energy Information Administration

Can the strait be bypassed?

Not easily. Saudi Arabia and the United Arab Emirates operate the only pipelines capable of shipping crude outside the Persian Gulf and the additional pipeline capacity to circumvent the strait, the EIA said. At the end of 2018, the total available crude-oil pipeline capacity for both countries combined was estimated at 6.5 million barrels a day. With 2.7 million barrels a day moving through the pipelines that year, around 3.8 million barrels a day of unused capacity would have been available to bypass the strait, the EIA said (see table below).

EIA

Could Iran close the strait?

The presence of the U.S. Navy’s Bahrain-based Fifth Fleet has long cast doubt on Iran’s ability to close the waterway, analysts said. In addition, the U.S. in May announced it was sending an aircraft carrier group, bombers and a Patriot antimissile battery to counter what the Trump administration said were “clear indications” that Iran and its proxies were preparing to possibly attack U.S. forces in the region.