Strait of Hormuz Disruptions Threaten Global Energy Supply

The escalating conflict involving Iran, Israel, and the United States has significantly disrupted oil and gas flows through the Strait of Hormuz, one of the world’s most critical energy transit routes.

Strategic Importance of the Strait

The Strait of Hormuz is a narrow waterway between Iran and Oman that links the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is bounded by Iran to the north and by Oman and the UAE to the south.

The strait is widely regarded as the world’s most important oil transit chokepoint, handling around one-fifth of global liquid petroleum consumption and a major share of global LNG trade.

Conflict and Disruptions

Following military strikes by Israel and the United States on Iran, Tehran retaliated by targeting Gulf states hosting American military installations. The widening conflict has disrupted shipping traffic through the Strait of Hormuz, raising concerns about global energy supply and maritime security.

Implications for India

For India, the disruption carries major energy security implications:

• About half of India’s crude oil imports (around 2.5–2.7 million barrels per day) pass through the Strait of Hormuz.
• Major suppliers include Iraq, Saudi Arabia, United Arab Emirates, and Kuwait.
• India is the world’s third-largest consumer of crude oil and has an import dependency exceeding 88%.

The vulnerability is even greater in the case of natural gas imports:

• Around 60% of India’s LNG imports pass through the Strait of Hormuz.
• Unlike crude oil, LNG and LPG spot cargo availability in global markets is limited, meaning prolonged disruption could cause supply shortages.

Energy Security Concerns

While crude oil supply can sometimes be managed through the spot market or strategic diversification, a prolonged closure of the Strait of Hormuz could create serious challenges for LPG and LNG supplies, which have fewer immediate alternatives.