Veteran oil traders have a feeling of d?j? vu. They are dusting off old maps of the Strait of Hormuz and reaching for obscure legal treaties to deal with the increasingly tense crisis in the oil-rich Gulf.

Iran?s threats to shut down the straitthis month has brought vivid memories of the so-called ?Tanker War? of 1984-88 when Iran and Iraq attacked each other?s oil ports in the Gulf and hit – and even sank – 250 oil supertankers.

?It is like going back 25 years,? said a London-based oil trader.

On average, 14 supertankers cross the strait each day carrying about 17m barrels of crude – enough to meet Chinese oil imports four times over.

?The worldwide interest in the shipment of oil through the Strait of Hormuz elevates this relatively narrow and shallow waterway to the position of the international oil highway,? said Rouhollah Ramazani, a scholar and author of The Persian Gulf and the Strait of Hormuz, one of the books oil traders are now re-reading.

At its narrowest point, the strait is less than 21 miles wide. But the sea lanes are even narrower as supertankers need at least 20-25 metres of draft and thus can navigate only in the deepest portion of the strait. In the area commonly known as the Strait of Hormuz, a 25-mile long separation scheme keeps inbound and outbound vessels apart.

But that navigation area, which is entirely within Omani territorial waters, is less of a worry for oil traders and ship brokers than the nearby ?western traffic separation scheme?, that lies just outside the strait proper but is within Iranian waters.

The western separation scheme is about 50-miles long – far longer than the strait itself – and consists of two three-mile wide lanes separated by an eight-mile wide buffer corridor. Traders say if problems arise, the western traffic separation scheme will be the focus.

If the geography of the Strait of Hormuz and its navigation channels is tricky, the law governing the area is even more com-plex, legal experts, oil tra-ders and ship brokers say.

Under international law, Iran – or other countries – cannot blockade the strait, lawyers say. But the law itself is not clear cut. The UN convention that governs the law of the sea, in existence since 1982, has not been ratified by either Iran or the US and so neither the country is legally bound by it.

But legal experts say that the 1982 convention formalised customs that were seen by most countries, including Iran, to be widespread already. Moreover, Iran is bound by a 1958 convention which provides for ?innocent passage? of vessels in international straits. Innocent passage means all vessels have a right to sail through territorial waters of a country as long as they do not prejudice the peace or security of a coastal state.

?That clearly covers crude-oil exports but not the Fifth Fleet ? which patrols up and down the strait,? said Ben Knowles, a litigator at Clyde & Co, the law firm, referring to the US Naval fleet based in Bahrain. ?That may well not be innocent passage.?

Even if Iran stops short of blockading the strait, it could hinder traffic. The nightmare scenario for the shipping and oil community is that Iran starts to search each supertanker sailing across the Western Separation Scheme, in effect creating a bottleneck and disrupting oil flows. This would fall short of a military action and the law is not clear cut about the consequences.

Under the 1982 convention, a state cannot take steps that have the ?practical effect of denying, hampering or impairing the right? of transit. Yet, some ship brokers and oil traders believe Iran could hamper the transit by, for example, searching oil tankers for drugs.

Colin de la Rue, a lawyer at Ince & Co in London, said that under the principle of innocent passage, Iran ?may not exercise its criminal jurisdiction? – ie, stop and search in relation to sus-pected offences – except in very limited and rare cases.

But others say Tehran could technically search a vessel in its waters that it suspected of criminal activity, slowing down traffic in the strait.

Disputes over the law of the sea typically go to international arbitration in The Hague or to Hamburg?s International Tribunal for the Law of the Sea, said Timothy Nelson, a litigator at Skadden in New York.

But lawyers agreed that such venues would be un-likely to be of use in resolving disputes in the short term.

? The Financial Times Limited 2012