Tensions are brewing between the US and Iran. Yesterday, a US F-35-C jet shot down an Iranian drone heading towards USS Abraham Lincoln. If a war breaks out, Tehran is likely to block the Strait of Hormuz, which could adversely affect India and China.
The Strait of Hormuz is a narrow maritime passage between Iran and Oman. It is one of the most strategic global energy pressure points, and any disruption here will adversely impact Asia, Europe, and beyond.
At its narrowest point, it is only 33 km wide. The navigable lane is not more than 10 km, with about 3 km of passage for outbound traffic and 3 km for inbound traffic.
The northern side of the strait is controlled by Iran, which has hilly terrain. From these hills, Iran can effectively monitor traffic flowing through the strait using radar. It can also deploy air defence and surface-to-surface weapons on these mountains to control who enters or exits the strait.
Geographic & Strategic Overview of the Strait of Hormuz
The geographic importance of this strait cannot be overemphasized, as global shipping lanes are completely dependent on it.
The southern part of Hormuz belongs to Oman, and the Musandam Peninsula juts into the strait, narrowing the passage even further. Very large naval ships cannot manoeuvre effectively in the strait because of the shallow depth. This limits naval vessels’ ability to carry out tactical actions, thereby restricting their options as they enter this choke point.
This geography favors asymmetric warfare. A smaller power does not need naval superiority to cause disruption; it only needs to create uncertainty.
Why the Strait of Hormuz Is So Important?
This is the world’s most important strategic energy chokepoint in human history.
The average daily energy flow through this strait, in terms of crude oil and condensate, is about 21 million barrels, which is roughly 20% of global consumption.
When it comes to LNG, about 90 million tonnes move annually, accounting for nearly 25% of global trade. Apart from these, refined petroleum products also move in large quantities through Hormuz every day.
To put this in perspective, one in every five barrels of fuel consumed in the world passes through this strait.
Why Pipelines Cannot Fully Replace the Strait
Saudi Arabia’s East–West pipeline carries oil to the Red Sea, but it is not sufficient to replace full Gulf exports.
The UAE’s Fujairah pipeline bypasses Hormuz, but it serves only a fraction of UAE exports. Kuwait and Qatar remain completely dependent on this strait.
Simply put, pipelines can offset the strategic importance of Hormuz to some extent, but they cannot completely replace it, at least not in the near future.
Nations that Depend on the Strait of Hormuz
Let us look at how oil-exporting countries of the Gulf would be affected.
Saudi Arabia exports millions of barrels per day, and oil revenue funds infrastructure, development, social spending, Vision 2030 reforms, as well as government salaries. Any disruption in oil flow outside the country will severely affect these sectors.
Iraq relies on oil for over 90% of its government revenue and social spending. Nearly 100% of Iraq’s exports depend on the Strait of Hormuz.
Qatar is the world’s largest liquefied natural gas exporter. It’s gas heats homes, powers factories, and generates electricity across Asia and Europe. Any disruption to Qatar’s gas exports will have a serious impact on the ground.
Major Energy Importers
India
India is one of the most exposed countries when it comes to any disruption of oil trade through this region. . India imports about 80–90% of its fossil fuels, including crude oil, and over 50% of its natural gas requirements from the Middle East.
Middle Eastern supply dominates due to proximity and compatibility with refining. Even a $10 increase in crude prices significantly worsens India’s trade deficit.
China
China is the world’s largest consumer of crude oil. Nearly 50% of its crude flows through this region. China does maintain strategic reserves, but these are not infinite. The Chinese economy, its stability, and the well-being of its people are heavily dependent on uninterrupted oil imports.
Japan and South Korea
Japan and South Korea have no domestic oil or gas production. Both of them are completely dependent on Middle Eastern energy supplies.
They hold large strategic reserves of around 120 days; however, these reserves are designed for emergencies, not prolonged crises.
How Energy Dependence Translates into Economic Vulnerability
Oil’s Role Beyond Transport
Oil drives nations. Diesel-powered agricultural pumps and tractors depend entirely on fuel. Any price fluctuation has a cascading effect on agricultural output, which directly impacts the common man. It also affects foreign reserves and inflation.
Aviation fuel plays a major role in transporting people and goods. Any increase raises ticket prices and fuels inflation.
India’s Inflation Sensitivity
India’s inflation sensitivity to increases in crude prices cannot be overstated. Food inflation, driven by higher transportation costs, directly affects the Indian government’s budgets and subsidies.
Household spending power declines sharply as oil prices rise. Historically, crude price shocks in India have weakened the rupee, forced tax adjustments, and widened fiscal deficits, severely impacting the country’s annual budgets.
Military Reality: Why the Strait Is Hard to Secure
Militarily, Iran enjoys substantial asymmetric capabilities.
It can render warships and even aircraft carriers ineffective through fast-attack boats, anti-ship missiles, and mining the region. This could prevent American vessels from entering or exiting Hormuz.
There are also intelligence reports suggesting Iran has developed submarine-launched anti-ship missiles in addition to torpedoes, with ranges sufficient to sink very large crude carriers. All of this gives Iran a tremendous asymmetric advantage.
VLCCs as Strategic Targets
VLCC (Very Large Crude Carrier) is an ideal tool for disruption. It is over 300 meters long and must move slowly in confined, shallow waters like Hormuz.
It can carry up to 2 million barrels of crude. An attack could spill oil, contaminate the region, and make it unusable for months.
Such a catastrophe is something neither America nor the world is prepared to accept. In many ways, this would be worse than a nuclear attack.
Scenario Analysis: If One or Two VLCCs Are Sunk or Disabled
Physical Disruption
A single disabled VLCC in the narrow lane can obstruct traffic in both directions.
As discussed earlier, the navigable width is only about 10 km. This would force ships to reroute, sometimes taking weeks or months to reach their destinations. Ships west of the strait could remain tangled, unable to exit Hormuz.
Salvage operations would be extremely slow due to the risks of oil spills and explosive hazards. The narrow corridor further complicates salvage efforts.
Insurance and Commercial Reaction
The shipping industry is entirely dependent on insurance. As risk rises, insurance premiums spike sharply, and insurers may even withdraw coverage from the region. Ship owners would then refuse to enter the area, as operating without insurance would be commercially unviable. Even without a formal blockade, shipping would be severely affected.
Immediate Impact on Global Oil Markets
A spike of up to 50% in global fuel prices is a realistic scenario. Panic buying by nations and consumers cannot be ruled out. Stock markets would plunge, especially in countries fully dependent on imported energy.
Specific Impact on India
Fuel Prices and Public Pressure
An increase in crude prices would directly translate into higher petrol and diesel prices. This would provide ammunition to opposition parties and intensify political pressure on the ruling government to cut taxes, thereby increasing subsidy burdens. In extreme cases, such pressures could even lead to the fall of a government.
Since India does not hold large strategic reserves, the impact would be immediate and severe.
External Sector Stress
Higher oil prices would increase import bills, weaken the rupee, and place heavy pressure on foreign exchange reserves. The RBI would struggle to manage inflation, and in extreme cases, India could slip into recession. This could lead to law-and-order issues and even malnutrition, reminiscent of conditions during the Second World War.
Strategic Reserves: A Temporary Buffer
India’s reserves cover only a few weeks of consumption. While higher prices may slightly reduce demand, the reduction would not be sufficient to withstand prolonged disruption.
Indian Railways would also be affected, affecting rural India’s access to food, medicine, and essential supplies.
Would Iran Take Such a Risk?
Whether Iran would take such a risk is a question no one can answer definitively. It may resort to such drastic measures if pushed to the wall by the US or Israel.
The current Iranian regime has demonstrated its resolve, allegedly even executing its own citizens to stay in power. Given this level of resolve, such actions cannot be ruled out and must be factored into any military planning involving Iran.
Can the Strait be Secured?
Naval Presence
International intervention appears to be the only viable solution. The United Nations has repeatedly demonstrated its inability to control such situations and has long been perceived as a toothless tiger.
Countries dependent on fossil fuels are gradually expanding mitigation strategies through renewable energy, increasing strategic reserves, and seeking alternative pipelines. India, for instance, is looking toward Russia for energy. These measures will take time to yield results. Until then, the Strait of Hormuz remains a major fault line.
Conclusion
The Strait of Hormuz is critically important because the global economy depends on the energy that flows through it. It is extremely fragile, both geographically and politically.
For India and other Asian countries that are heavily dependent on imported energy, there is little control over the actions of the US, Israel, or Iran.
Iran holds significant leverage due to its strategic advantage. If pushed to the wall, it may take drastic action—one that could trigger consequences potentially worse than a nuclear winter.
- Group Captain MJ Augustine Vinod (Retd), VSM, is a former Mirage 2000 fighter pilot, air accident investigator, and co-founder of AMOS Aerospace. He writes on emerging defense technologies, AI in warfare, and India’s aviation future.
- This is an Opinion Article. Views Personal Of The Author
- He tweets at @mjavinod
