Context:

The recent approval by Iran’s Parliament to potentially close the Strait of Hormuz, pending a final decision by its Supreme National Security Council, has intensified global concerns about energy security and geopolitical stability. This comes in response to U.S. strikes on Iranian military sites, marking a serious escalation in the Gulf region.

Strategic Significance of the Strait of Hormuz

• The Strait of Hormuz is a 33 km-wide maritime chokepoint linking the Persian Gulf with the Gulf of Oman and, subsequently, the Arabian Sea. It handles over 25% of global seaborne oil trade, 20% of global oil consumption, and 20% of LNG trade, primarily from Qatar.
• The geographical location of the strait—falling within Iranian and Omani territorial waters—makes it one of the most sensitive energy corridors globally.
• The strait’s vulnerability is compounded by its narrow 3 km-wide navigational channels, making it susceptible to blockades, naval mines, missile strikes, or cyberattacks.
• Historically, Iran has issued such threats without actual closure, even during periods of conflict, largely due to its own dependency on the strait for oil exports, especially to China.

Implications of a Blockade

A complete or even partial blockade could have catastrophic global impacts:

• Disruption of Global Energy Supply: With no alternative sea route, any disruption would curtaildaily movement of 20 million barrels of oil, causingsharp price spikes.
• Limited Overland Alternatives: Saudi Arabia’s East-West pipeline (5 million bpd) and the UAE’s Fujairah pipeline (1.8 million bpd) cannot compensate for the loss of Hormuz transit.
• Higher Shipping and Insurance Costs: Perceived risk increases freight rates, insurance premiums, and logistical expenses globally.

Impact on India

India, the third-largest crude oil consumer, imports over 85% of its oil and 50% of its natural gas. In May 2025 alone, 47% of India’s crude imports passed through the Strait of Hormuz. Disruption would result in:

• Price Volatility: Even if supplies are not entirely blocked, oil and gas prices will spike, stressing the economy.
• Macroeconomic Stress: A surge in energy prices could widen the trade deficit, weaken the rupee, reduce forex reserves, and raise inflation.
• Competitive Pressure: If Iran’s exports to China are blocked, Beijing may seek oil from other producers, increasing global demand and costs, impacting India’s energy budget.

India’s Resilience and Strategic Measures

Despite the vulnerabilities, India has certain buffers:

• Diversification of Energy Sources: Imports from Russia, the U.S., Africa, and Latin America are not dependent on Hormuz. Russian oil arrives via the Suez Canal or Cape of Good Hope, while Qatar’s LNG also uses alternate maritime routes.
• Strategic Reserves: India maintains 9–10 days’ worth of strategic oil reserves for emergencies.
• Government Policy Levers: In case of a prolonged crisis, the government may offer price subsidies for diesel and LPG to contain inflation.

Conclusion

The Strait of Hormuz remains a vital artery of global energy supply and a flashpoint of geopolitical tensions. While India has taken commendable steps toward energy diversification and crisis preparedness, continued diplomatic engagement in West Asia, investments in energy alternatives, and strengthening strategic reserves will be key to mitigating the fallout from any potential blockade.