The Strait of Hormuz: Lifeline of Global Energy and India’s Strategic Challenge Amid US Attacks on Iran

The Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the Gulf of Oman and the Indian Ocean, is one of the world's most strategically significant maritime chokepoints.

Recent US strikes on Iranian nuclear facilities have reignited fears that Iran could attempt to close this vital passage, threatening global oil supply and causing ripple effects across major economies-including India.

Photo Credit: AP/PTI File Photo

Here's a look into the geography, strategic importance, Iran's threats, and the potential impact on India and the world if the Strait were to be blocked.

What is the Strait of Hormuz?
The Strait of Hormuz is a narrow channel, just 33 kilometers wide at its narrowest point, separating Iran to the north from the Arabian Peninsula to the south. The actual shipping lanes are even narrower-about two miles wide in each direction-making them highly vulnerable to disruption.

This strait is the only sea passage from the Persian Gulf to the open ocean. It serves as the primary export route for oil and gas from Gulf producers such as Saudi Arabia, the United Arab Emirates (UAE), Iraq, Kuwait, Qatar, and Iran itself. According to the US Energy Information Administration (EIA), about 20% of the world's daily oil consumption-approximately 20 million barrels per day-passes through the Strait of Hormuz, along with significant volumes of liquefied natural gas (LNG).

Why Does Iran Threaten to Close the Strait?

Iran has repeatedly threatened to close the Strait of Hormuz in response to military or economic pressure, especially from the US and its allies.

The most recent threats followed US airstrikes on Iranian nuclear facilities and mounting Western pressure over Iran's nuclear ambitions.

Iran's rationale for threatening closure is twofold:

Leverage Against Adversaries: By threatening to choke off the world's oil supply, Iran seeks to deter military action against itself and to pressure adversaries to ease sanctions or cease hostilities.

Retaliation: In times of conflict-such as the Iran-Iraq War's "Tanker War" phase, or after US sanctions-Iran has used the threat of closure as a form of retaliation.

However, while Iran has repeatedly made such threats, it has never actually closed the Strait. The reasons are pragmatic: closure would harm Iran's own economy, alienate key trading partners like China and India, and likely provoke overwhelming international military retaliation.

Global Impact of a Closure

Oil Supply Disruption
The Strait of Hormuz is the world's most important oil transit chokepoint. In 2024, daily shipments through the strait averaged 20.3 million barrels of oil and 290 million cubic meters of LNG. The bulk of oil exports from Saudi Arabia, Iraq, UAE, Qatar, Iran, and Kuwait must transit this waterway.

A closure, even temporary, would disrupt nearly a fifth of global oil supply. According to the International Energy Agency (IEA), any disruption would have "significant consequences for world oil markets," causing prices to skyrocket and triggering panic in energy markets.

Impact on Prices
Geopolitical tensions in the region have already caused oil prices to spike. Following the recent US-Iran escalation, Brent crude surged to $77 per barrel, up 10% since the conflict began. Analysts at Goldman Sachs and Citigroup warn that prices could exceed $90 per barrel if the strait is closed. Some Iranian state media have even warned of oil hitting $400 per barrel in a worst-case scenario, though experts view this as unlikely.

Wider Economic Fallout
The impact would not be limited to oil-importing countries. A prolonged disruption would cause inflation, slow economic growth, and potentially trigger a global recession. Energy-intensive industries, transportation, and consumers worldwide would bear the brunt of higher costs.

Why a Full Closure Is Unlikely
Despite repeated threats, Iran has never closed the Strait. Several factors make a prolonged blockade improbable:

Self-Inflicted Harm: Iran relies on the strait for its own oil exports (96% via Kharg Island). Closing it would devastate its economy.

Impact on Allies: Major customers like China and India would be hit hard, straining Iran's diplomatic ties.

Regional Backlash: Gulf states, Oman (which controls the southern half), and the Gulf Cooperation Council (GCC) would oppose any closure.

International Military Response: The US Navy and its allies maintain a strong presence in the region. Any Iranian attempt at closure would likely be met with swift military retaliation.

Diplomatic Leverage: Iran often uses the threat as a bargaining chip rather than a real option.

At most, experts believe Iran could attempt short-term sabotage or harassment operations, disrupting flows for 24-48 hours before being neutralized by US and allied forces.

The Strait of Hormuz and India

India's Energy Vulnerability
India is the world's third-largest oil importer, relying on imports for about 90% of its crude oil needs. Of the 5.5 million barrels of oil India consumes daily, about 1.5 to 2 million barrels pass through the Strait of Hormuz. Similarly, nearly half its LNG imports transit this route.

Middle Eastern countries-Saudi Arabia, Iraq, UAE, Kuwait and Qatar-are major suppliers. Any disruption would directly impact India's energy security, pushing up fuel prices, causing inflation, and affecting GDP growth. Experts estimate that for every $10 rise in crude prices, India's GDP could suffer by 0.5%.

India's Readiness and Diversification
India has taken steps to diversify its energy sources. Imports from Russia have surged, and supplies from the US, West Africa and Latin America are increasingly viable alternatives. Union Minister Hardeep Puri has stated that India is not 'unduly worried' about a potential closure, as ample crude is available globally and alternative supply routes exist.

However, alternative sources come with higher costs and logistical challenges. Russian oil, for example, is shipped via the Suez Canal or around Africa, increasing transit time and expense. LNG from Australia, Russia, and the US would also be unaffected by a closure, but the global price impact would still be felt.

Impact on Indian Exports
India is a net exporter of petroleum products, with companies like Reliance Industries and Nayara Energy shipping refined products worldwide. In a crisis, India may need to reduce exports to maintain domestic supply, impacting its export earnings.

Economic and Strategic Risks
A prolonged disruption would raise India's import bill, widen the current account deficit, and put pressure on the rupee. It could also strain India's diplomatic relations with both Gulf suppliers and global powers, forcing New Delhi to balance its strategic interests.

The Bottom Line
The Strait of Hormuz remains a critical artery for global and Indian energy security. While Iran's threats to close the strait are serious, a full blockade is unlikely due to the severe consequences for Iran itself and its allies.

For India, the risk lies more in price shocks and short-term disruptions than in a complete cutoff of supplies.

Nevertheless, the situation underscores the importance of energy diversification, strategic reserves, and diplomatic engagement to safeguard India's interests in an increasingly volatile region.