Iran's parliament has approved the closure of the Strait of Hormuz in protest against the US attack. However, the approval of the top security body will be necessary for the final decision. This narrow route connecting the Persian Gulf to the Arabian Sea is a major oil trade in the world. If it is closed, oil prices will increase all over the world. US Secretary of State Marco Rubio urged China to stop Iran from closing this route.
However, India has enough oil to meet its energy needs for several weeks. Petroleum Minister Hardeep Singh Puri said that India is getting energy supplies from many routes. Let us tell you that India is the world's third-largest oil importer and fourth-largest gas buyer. Puri said, 'The government has been keeping a close watch on the situation in West Asia for two weeks. Under the leadership of PM Narendra Modi, we have diversified our supplies in the last few years. Now most of our supplies do not come from the Strait of Hormuz. Out of India's total oil import of 5.5 million barrels per day (bpd), only about 2 million bpd comes through this narrow waterway. However, India has ensured oil supply from different countries like Russia, America, and Brazil in the last few years.'
Russian oil does not come through Hormuz.
Oil coming from Russia does not come through the Hormuz route. It comes through the Suez Canal, the Cape of Good Hope, or the Pacific Ocean. Supply from America, West Africa, and Latin America, though expensive, is increasingly becoming a viable option. Puri said that we will take the necessary steps for the stability of our fuel supply.
India's energy security will be affected.
Dr. Laxman Kumar Behera, Associate Professor at the Special National Security Study Center at Jawaharlal Nehru University, said that the closure of this narrow route will have a significant impact on energy markets globally and India's energy security will also be affected. He said, 'Any disruption in this important shipping route, which is a point of geopolitical conflict, will affect India's crude oil imports from Iraq and to a lesser extent Saudi Arabia.'
Closure of sea routes will increase insurance premiums.
Former Indian Navy spokesperson Captain DK Sharma (Retd), who keeps a close eye on developments in the Gulf region, also said that Iran's threat to block the Strait of Hormuz could cause significant disruption in global oil trade. He said that any disruption in shipping could affect insurance premiums, making it costly to change the route of oil transportation.
Fear of rising oil prices
Sharma said that due to increasing tension in the region, oil prices are already expected to rise. In such a situation, if Iran retaliates, then prices can reach $ 80-90 per barrel or even $ 100 per barrel. He also said that there can be a lot of instability in the currencies of regional countries and investors can turn to other stable markets which can have an impact on the economic growth of the region.
Iran will suffer a lot: Rubin.
Former US Defense Headquarters Pentagon official Michael Rubin said that if Iran closes the Hormuz route, it will suffer a lot. He said, 44 percent of the oil going to Asia goes through this route. Most of it goes to China. American terrorism finance analyst Jonathan Schanzer said that if Iran tries to close the Hormuz route, America will give a strong response. Britain and France will also support us in this. This step of Iran will be suicidal.
Impact on India's trade with West Asia
The escalation of the war will have a huge impact on India's trade with West Asian countries including Iraq, Jordan, Lebanon, Syria, and Yemen. India exports $ 8.6 billion to them and imports $ 33.1 billion. Cargo will also increase due to the closure of the Hormuz route. Every fourth ship of crude oil comes from here. 30% of the world's daily oil supply comes from here.
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