{"id":51399,"date":"2025-06-23T11:00:39","date_gmt":"2025-06-23T05:30:39","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=51399"},"modified":"2025-06-23T12:03:20","modified_gmt":"2025-06-23T06:33:20","slug":"iran-moves-to-block-strait-of-hormuz-global-oil-trade-at-risk","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/iran-moves-to-block-strait-of-hormuz-global-oil-trade-at-risk\/","title":{"rendered":"Iran Moves to Block Strait of Hormuz: Global Oil Trade at Risk"},"content":{"rendered":"<h2><b>Strait of Hormuz Blockade Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Iran\u2019s Parliament has approved a proposal to close the Strait of Hormuz, pending a final decision by the Supreme National Security Council, following US strikes on Iranian military sites.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While previously seen as unlikely, the threat now appears serious.<\/span><\/li>\n<\/ul>\n<h2><b>Strait of Hormuz<\/b><\/h2>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-51446\" src=\"https:\/\/d35xcwcl37xo08.cloudfront.net\/current-affairs-wp-uploads\/2025\/06\/image5.webp\" alt=\"\" width=\"885\" height=\"707\" srcset=\"https:\/\/d35xcwcl37xo08.cloudfront.net\/current-affairs-wp-uploads\/2025\/06\/image5.webp 885w, https:\/\/d35xcwcl37xo08.cloudfront.net\/current-affairs-wp-uploads\/2025\/06\/image5-768x614.webp 768w\" sizes=\"(max-width: 885px) 100vw, 885px\" \/><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Strait of Hormuz is a narrow waterway that connects the Persian Gulf with the Gulf of Oman, eventually leading to the Arabian Sea.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It serves as a crucial maritime passage for oil-exporting countries like Iran, Saudi Arabia, and the UAE. It handles a significant portion of the world\u2019s oil trade.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Its location in the territorial waters of Iran and Oman adds to its geopolitical sensitivity.<\/span><\/li>\n<\/ul>\n<h3><b>Geographic Vulnerability<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At its narrowest, the strait is just 33 km wide, with a 3 km wide shipping lane in each direction.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This limited space makes it highly vulnerable to blockades or attacks on passing vessels.<\/span><\/li>\n<\/ul>\n<h2><b>Significance of the Strait of Hormuz<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Strait of Hormuz is the world\u2019s most important oil and LNG transit route.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In 2024\u201325, over 25% of global seaborne oil trade and 20% of global oil and petroleum consumption passed through it.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Additionally, 20% of global LNG trade, mainly from Qatar, also transited the strait.<\/span><\/li>\n<\/ul>\n<h3><b>No Sea Route Alternatives<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Geographically, there is no direct sea route alternative to bypass the Strait.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Any disruption would severely affect global oil and gas flows, causing sharp price hikes and broader inflationary impacts.<\/span><\/li>\n<\/ul>\n<h3><b>Limited Overland Alternatives<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Saudi Arabia and the UAE have overland pipelines\u2014the 5 million bpd East-West pipeline and the 1.8 million bpd Fujairah pipeline, respectively.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, these are insufficient compared to the 20 million bpd flow through Hormuz.<\/span><\/li>\n<\/ul>\n<h3><b>Higher Shipping Costs<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Perceived risks in the region increase insurance premiums and security costs, making global shipping more expensive and further impacting global trade.<\/span><\/p>\n<h2><b>Iran to Block the Strait of Hormuz<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Blocking or disrupting the Strait of Hormuz could involve laying sea mines, missile or bomb attacks on passing ships, detaining vessels, or launching cyberattacks on maritime systems.<\/span><\/p>\n<h3><b>Strategic and Diplomatic Constraints for Iran<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite repeated threats, <\/span><span style=\"font-weight: 400;\">Iran has never actually closed the Strait, even during wartime<\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Experts say such action would harm Iran itself, <\/span><span style=\"font-weight: 400;\">especially its oil exports to China\u2014its main customer<\/span><span style=\"font-weight: 400;\">\u2014and strain recent diplomatic gains with Saudi Arabia and the UAE.<\/span><\/li>\n<\/ul>\n<h3><b>Global Consequences of a Blockade<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">A blockade would not only disrupt global energy markets, especially affecting China (which sources 47% of its seaborne crude from the Gulf), but would also provoke a strong military response, likely from the US Fifth Fleet.<\/span><\/p>\n<h2><b>Impact on India<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India, the third-largest crude oil consumer, relies on imports for over 85% of its oil and about 50% of its natural gas.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Nearly 47% of India\u2019s May crude imports transited through the Strait, making it a lifeline for supplies from West Asian countries like Iraq, Saudi Arabia, UAE, Qatar, and Oman.<\/span><\/li>\n<\/ul>\n<h3><b>Price Volatility Is the Main Risk<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While India has diversified oil sources\u2014including Russia, the US, Africa, and Latin America\u2014a blockade of Hormuz would disrupt global supply chains.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This, in turn, will cause oil and gas prices to spike, even if availability is not immediately compromised.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A price surge would impact <\/span><b>trade deficit, forex reserves, rupee value<\/b><span style=\"font-weight: 400;\">, and <\/span><b>inflation<\/b><span style=\"font-weight: 400;\">, stressing the overall economy.<\/span><\/li>\n<\/ul>\n<h3><b>China\u2019s Shift Could Intensify Demand Pressure<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">If Iran\u2019s exports to China are blocked, Beijing may turn to other suppliers, increasing competition and further inflating prices, impacting India\u2019s energy costs and broader economic stability.<\/span><\/p>\n<h3><b>Ripple Effects on Freight and Refining Margins<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Disruptions would lead to higher freight rates and tanker insurance premiums, shrinking refinery margins across Asia, according to S&amp;P Global\u2019s analysis.<\/span><\/p>\n<h2><b>India\u2019s Preparedness Amid Strait of Hormuz Tensions<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Due to rising tensions in the Middle East, oil prices could temporarily rise to USD 80 per barrel, according to analysts.<\/span><\/p>\n<h3><b>India\u2019s Key Energy Routes Remain Largely Unaffected<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Russian oil reaches India via the Suez Canal, Cape of Good Hope, or Pacific routes, bypassing the Strait of Hormuz.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Qatar\u2019s LNG supplies to India also do not rely on the Strait.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Other LNG sources like Australia, Russia, and the US remain unaffected.<\/span><\/li>\n<\/ul>\n<h3><b>Diversification and Strategic Reserves Offer Cushion<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India can:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Tap into its strategic oil reserves (9\u201310 days&#8217; worth of imports)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Increase imports from alternate suppliers like the US, Nigeria, Angola, and Brazil\u2014though at higher freight costs<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><b>Potential Government Measures to Control Inflation<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">To offset rising domestic prices, the government may consider price subsidies, especially for diesel and LPG, to curb inflationary pressure.<\/span><\/p>\n<p><b>Source<\/b> <a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-global\/iran-block-strait-of-hormuz-4-points-explained-10081870\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">IE<\/span><\/a><span style=\"font-weight: 400;\">\u00a0| <\/span><a href=\"https:\/\/www.indiatoday.in\/business\/story\/india-oil-imports-strait-of-hormuz-iran-israel-conflict-us-strikes-nuclear-sites-2744663-2025-06-22\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">IT<\/span><\/a> |<span style=\"font-weight: 400;\">\u00a0<\/span><a href=\"https:\/\/www.hindustantimes.com\/business\/iran-hints-at-strait-of-hormuz-closure-how-will-it-impact-indian-crude-imports-101750591385145.html\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">HT<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Iran may block the Strait of Hormuz, threatening oil supply and global trade. India, China, and global markets face high risks.<\/p>\n","protected":false},"author":18,"featured_media":12820,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,983,22,59],"class_list":{"0":"post-51399","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-strait-of-hormuz-blockade","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/51399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=51399"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/51399\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/12820"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=51399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=51399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=51399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}