Strait of Hormuz: Will oil prices rise in India if Iran closes the water corridor?
The Strait of Hormuz is a narrow passage through which about 20 per cent of the world’s oil is shipped. For India, nearly 60-65 per cent of crude oil imports transit this corridor from Gulf nations.
The current risk
After US airstrikes on Iranian nuclear facilities, Iran has threatened to close the Strait of Hormuz — a move that could impact global oil markets, including India.
Why this strait matters
The Strait of Hormuz is a narrow passage through which about 20 per cent of the world’s oil is shipped. For India, nearly 60-65 per cent of crude oil imports transit this corridor from Gulf nations.
Immediate impact on prices
If Iran blocks the strait, crude oil prices could spike globally. Analysts warn of prices shooting above $120 per barrel, directly impacting India’s oil import bill.
Effect on Indian economy
Rising oil prices would likely lead to higher fuel costs — petrol, diesel, LPG — for Indian consumers. This could also trigger overall inflation, affecting transport, manufacturing, and household expenses.
Can India manage?
India has strategic oil reserves that can cover about 9-10 days of imports. Alternate supplies (US, Russia, West Africa) exist, but rerouting takes time and costs more.
How quickly would prices rise?
Global markets react immediately. Indian consumers might feel the pinch within weeks, depending on how long the strait remains closed and how quickly new supplies are arranged.
Bottom line
If Iran shuts the Strait of Hormuz, Indian oil prices could rise, not instantly, but sharply if the closure persists. Consumers and businesses should brace for possible volatility in the weeks ahead.
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