CONTEXT

• Iran’s parliament passed a motion to close the Strait of Hormuz after US airstrikes on Iranian nuclear sites.
• Final decision pending with Iran’s Supreme National Security Council.
• Comes amid Israel-Iran conflict, increasing global energy insecurity.

CONCEPT: STRATEGIC IMPORTANCE & LEGAL ASPECTS

• Strait of Hormuz: Narrow waterway between Iran and Oman, connecting the Persian Gulf and Gulf of Oman.
• Transits ~20% of global oil and a large volume of LNG.
• Major conduit for oil from Iraq, Saudi Arabia, UAE and LNG from Qatar to global markets, including India.
• Governed by UNCLOS (United Nations Convention on the Law of the Sea) – ensures freedom of navigation through international straits.
• Identified by the US EIA as the world’s most critical oil chokepoint.

CURRENT: RELEVANCE TO INDIA & ECONOMIC IMPACT

• India is the 3rd largest oil consumer, imports 85%+ of crude oil, and ~50% of natural gas.
• Key suppliers transiting via Hormuz: Iraq, Saudi Arabia, UAE, Kuwait, Qatar.
• Any blockade → severe disruption in India’s energy supply chain.
• Would cause:
  • Spike in global crude and LNG prices.
  • Increased import bill, widening Current Account Deficit (CAD).
  • Higher inflation and fiscal pressure via fuel subsidies.
  • Adverse impact on transport, manufacturing, and power sectors.
• Indian refiners are monitoring developments closely; no supply cuts yet, but:
  • Shipping insurance & freight costs rising.
  • Rerouting or delay risks being considered.
• India currently does not import Iranian oil due to US sanctions.

MAP WORK ESSENTIALS

• Locate: Strait of Hormuz, Persian Gulf, Gulf of Oman, Arabian Sea.
• Neighboring countries: Iran, Oman, UAE, Saudi Arabia.
• Note: Major Indian ports receiving oil – Mumbai, Mundra, Kochi, Visakhapatnam.