The Iranian parliament has passed a resolution to close the strait of Hormuz following the USA bombing on its critical Nuclear installations. The decision, if implemented by Iran, will have serious implications of global trade and energy supplies.
The Strait of Hormuz is a critical chokepoint for global oil and gas trade, with approximately 20% of the world’s and 40% India’s crude oil and a significant portion of liquefied natural gas (LNG) passing through it. If Iran were to close the Strait of Hormuz, India would be significantly impacted, despite its efforts to diversify its energy sources.
However, the Impact would be limited as India has significantly diversified its oil imports in the last two years, especially after the start of the Ukraine war. Russia is now the top oil exporter of India with projections that oil imports from Russia to India to touch 2-2.2 million barrels per day in June 2025. Russian Oil doesn’t use the Hormuz strait, instead it use the Suez Canal and the cape of good hope. Similarly India’s oil imports from the USA have increased to 439,000 bpd in June from 280,000 bpd in May. India also imports oil from several West African countries like Nigeria and Angola. USA and African oil shipments do not use the strait of Hormuz. Similarly India imports a significant portion of its natural gas from Qatar which does not use the strait. So India many not be significantly impacted due to the closure of the strait of Hormuz, although oil shipments from Saudi Arabia, Kuwait and Iraq will be impacted.