Iran’s Parliament, the Majlis, has reportedly approved the decision to close the Strait of Hormuz in response to recent US strikes on Iranian nuclear facilities, as reported by Iran’s state-owned media PressTV. The final decision now rests with Iran’s Supreme National Security Council. The Strait of Hormuz is a narrow waterway connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea, and is one of the most critical corridors for global oil transportation.
The Strait facilitates the passage of approximately 20% of the world’s daily liquid petroleum, making it a vital strategic and economic route. If Iran proceeds with closing the strait, it would significantly disrupt global oil trade, potentially causing sharp increases in oil prices and economic instability worldwide. Major oil-exporting countries such as Saudi Arabia, Iraq, the UAE, Kuwait, and Iran rely heavily on this route to export their crude. The US Energy Information Administration notes that many of these nations could reroute their shipments through alternative pathways, but such shifts could be costly and inefficient.
India, which imports around 90% of its crude oil needs, is particularly vulnerable to disruptions in the Strait of Hormuz. Currently, about 2 million barrels per day of India’s oil imports transit through this strategic waterway. However, India’s diversified supply sources—including Russia, the US, Nigeria, Angola, and Brazil—provide a buffer against potential supply shocks, as confirmed by India’s Oil Minister Hardeep Singh Puri. Despite this, experts warn that tensions surrounding the Strait could push global oil prices above $80 per barrel, with some analysts suggesting prices could approach $90 or higher if the situation worsens.
The possibility of Iran blocking the strait by force remains low due to the risk of a strong military response from the US and allied navies. Nonetheless, escalating tensions, especially after recent hostilities between Iran and Israel and US military actions, threaten to increase regional instability. Such developments could lead to short-term price hikes and supply chain disruptions, impacting economies worldwide.
In summary, the ongoing tensions surrounding the Strait of Hormuz represent a significant geopolitical risk with the potential to influence global energy markets and economic stability. While India’s strategic reserves and diversified sources offer some protection, the broader implications of a closure—whether temporary or prolonged—could be profound, underscoring the importance of diplomatic and security measures in the region.
