Impact of Potential Closure of the Strait of Hormuz

The potential blocking or disruption of traffic through the Strait of Hormuz could have significant consequences globally and regionally, particularly affecting India's energy security.

Key Global and Regional Impacts

• The Strait of Hormuz is a crucial shipping lane connecting the Persian Gulf to the Arabian Sea.
• Approximately 30% of global oil and one-third of the world’s LNG passes through it daily.
• Closure of the strait would reduce global oil supplies and trigger a price spike.

Effect on India's Energy Security

• They emphasized the strait's significance for India's crude oil imports from Iraq and Saudi Arabia.
• Disruptions could lead to increased costs for India due to higher insurance premiums and potential rerouting of oil shipments.

Global Political Reactions

• Iran's indication to close the strait is a strategic move following US airstrikes on its nuclear sites.
• This could lead to a surge in oil prices, potentially reaching $80-$100 per barrel.

International Diplomatic Efforts

• US Secretary of State urged China to dissuade Iran from closing the strait due to China's reliance on it for oil transport.
• The closing the strait would be a major escalation, prompting a response from the US and others.