Strait of Hormuz and Energy Geopolitics
The Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf, is the world's most critical oil chokepoint. Approximately 20-21 million barrels of oil per day transit through the Strait — roughly 20-21% of global oil consumption. Iran has periodically threatened to close the Strait in response to Western pressure. Escalating US-Iran tensions in 2026 have raised fears about Strait closure or mine-laying, disrupting oil supply routes from Saudi Arabia, Iraq, UAE, Kuwait, and Qatar — all of which export through the Strait.
- Alternatives to Strait of Hormuz: Saudi Arabia's East-West Pipeline (capacity: 5 million bpd) and the UAE's Abu Dhabi Crude Oil Pipeline can partially bypass the Strait — but combined capacity is well below Strait throughput.
- India has no direct pipeline connection to Gulf suppliers — all imports come by sea, making Strait disruptions directly impactful.
- Brent crude price sensitivity: Any significant Strait disruption typically triggers a $10-20 per barrel price spike on global markets, directly worsening India's current account deficit (every $10 rise in crude prices adds approximately $15 billion to India's import bill).
- India's Strategic Petroleum Reserve (SPR): India maintains strategic reserves at Visakhapatnam, Mangaluru, and Padur (combined capacity ~5 million tonnes) — approximately 9-10 days of import cover; the government has proposed expansion to extend cover to 30+ days.
- Iran's leverage: Its geographic control over the Strait gives Iran significant coercive capacity regardless of military strength — a key reason Western powers seek diplomatic solutions.
● Tracked since March 31, 2026 · last seen May 15, 2026 · updates as the daily brief publishes
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