Iran's parliament has approved the closure of the strategically vital Strait of Hormuz after American strikes on its nuclear facilities. According to state media, Iran’s Supreme National Security Council must finalize this decision. Major General Kosari, a council member, stated that closing the strait marks a significant response to recent tensions.
If Iran proceeds to close the Strait of Hormuz, it could severely disrupt global trade, cause oil prices to spike, and add instability to the world economy. Approximately 20% of the world's oil passes through this narrow passage. Such a move could exacerbate tensions in the Middle East, a region already strained by conflicts involving Israel, Hamas, and Hezbollah, as well as political instability in Syria.
This narrow yet crucial strait acts as the singular maritime passage for oil tankers transporting crude from the Persian Gulf, making it one of the world's key corridors for oil imports. Approximately 17 million barrels of oil, or about 20-30% of global consumption, transit daily through this crucial corridor. Additionally, about one-third of the world's liquefied petroleum gas also passes through this strait, highlighting its significance to global energy security.
Source: aajtak
A closure or blockade of the strait by Iran would disrupt a vital portion of global oil exports, creating shortages and leading to a surge in oil prices. Key oil-exporting nations like Saudi Arabia, Iran, the UAE, Kuwait, and Iraq primarily use this waterway for exports, particularly towards Asia. In response, the UAE and Saudi Arabia have been exploring alternative routes to bypass the strait.
The US Energy Information Administration highlighted that alternative routes using the UAE's and Saudi Arabia's pipelines could provide a bypass capacity of approximately 2.6 million barrels per day. However, given the narrowness and military sensitivity of the strait, any closure attempts could heighten regional tensions. If Iran does block the strait, it would face significant economic and geopolitical repercussions.
Although India sources its oil and energy needs from various countries, including Russia and Arab nations, a substantial portion comes from Iran. Experts warn that a closure could impact India's supply chain, triggering price hikes and affecting goods pricing. Speaking with India Today TV, Petroleum Minister Hardeep Singh Puri assured that India is prepared for adversities, maintaining stable energy rates amidst the Israel-Iran tensions.
Technically, Iran lacks the legal authority to stop vessels through this critical shipping route. However, it could resort to forceful measures. If Iran’s navy attempts a blockade, robust responses from the US 5th Fleet and other Western navies patrolling the area are anticipated. Economically, a blockade would also impact Iran, hindering its petroleum exports.
Additionally, Iran's reliance on transit for its oil exports underscores the Strait's economic importance, with an export terminal situated at Jask on its eastern front. A blockade would prompt concerns from China, Iran's largest oil customer and strategic partner, which has used its UN Security Council veto power to shield Iran from Western sanctions.
