As tensions escalate in the Middle East following airstrikes by the United States on Iranian nuclear facilities, Iran has hinted at the possibility of closing the Strait of Hormuz- a move that could have far-reaching consequences for global oil markets and India’s energy supply.
Strategic importance of the 'Strait of Hormuz'
The Strait of Hormuz, a narrow maritime chokepoint between Iran and Gulf Arab states, is one of the world’s most critical energy transit routes. According to a Bloomberg report, nearly 20 per cent of global oil passes through the strait daily. It is also a key conduit for liquefied natural gas (LNG), with approximately one-third of the global LNG trade utilising this route.
Iran signals possible closure amid escalating tensions
In the wake of the US strikes, Iranian Foreign Minister Seyed Abbas Araghchi stated that 'a variety of options are available to Iran,' signalling that a blockade of the Strait is under consideration. This sentiment was echoed by other Iranian officials, including Mohammad Javad Hosseini, Deputy Chief of Mission at Iran’s embassy, who reiterated that closing the strait remains on the table.
Potential impact on India’s energy supply
India relies heavily on crude oil imports from the Middle East- particularly from Iraq, Saudi Arabia, the UAE, and Kuwait- accounting for around 40 per cent of its total oil imports. These shipments primarily transit through the Strait of Hormuz.
However, India has significantly diversified its energy sources in recent years. A large share of crude now comes from Russia, which uses alternative shipping routes such as the Suez Canal, Cape of Good Hope, or the Pacific Ocean. Additionally, Qatar- India’s primary LNG supplier- along with other major LNG exporters like the U.S., Australia, and Russia- do not depend on the Strait of Hormuz for shipping to India.
Short-term disruption still a risk
Dr Laxman Kumar Behera, Associate Professor at the Special Centre for National Security Studies (JNU), noted that a closure would particularly disrupt crude supplies from Iraq and, to a lesser extent, Saudi Arabia. Even a brief shutdown could cause significant volatility in global energy markets.
The International Energy Agency (IEA) echoed this concern, stating that “geopolitical and economic uncertainties affecting oil producers and consumers alike” continue to keep oil supply security high on the global agenda.
Global market consequences
Closure of the strait could force rerouting of oil shipments, increasing transportation costs and causing ripple effects across global markets. It may also destabilise currencies in the Gulf region and further tighten oil supplies, potentially driving up prices in an already fragile energy landscape.
Why is a full closure remains unlikely?
Despite repeated threats, a prolonged disruption of the Strait of Hormuz appears unlikely. The Strait is vital not only for U.S.-aligned Gulf states but also for Iran itself. Over 75 per cent of Iran’s oil exports, largely destined for China (which imports nearly 47 per cent of Iran’s seaborne crude), pass through the strait.
Closing it would be a self-defeating strategy for Tehran, likely triggering international military backlash and further isolating Iran economically.
A high-stakes signal, but not a certainty
While the threat of closure serves as a strategic signal amid rising geopolitical tension, the economic and diplomatic costs for Iran are substantial. As the Israel-Iran conflict unfolds, the global community will closely watch for any concrete moves toward disrupting one of the world’s most vital maritime energy corridors.
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