Iran Threatens to Close Strait of Hormuz After US Strikes Nuclear Sites: What It Means for India and Global Oil Prices

New Delhi, June 23 – In a major escalation of geopolitical tensions, Iran has reportedly signaled plans to shut the Strait of Hormuz following US airstrikes on three of its nuclear facilities, Iranian media said on Monday. The potential closure of this vital oil shipping lane has raised concerns worldwide, especially for major oil-importing nations like India and China.

The move comes amid heightened hostilities in the region and is being closely watched by global markets, which have already begun to respond with rising crude oil prices.

The Strait of Hormuz is a narrow but strategic waterway linking the Persian Gulf to the Arabian Sea and Indian Ocean. At its narrowest, it spans just 33 kilometers, with designated shipping lanes of only 3 kilometers in each direction — making it highly susceptible to blockades or military action.

Crucially, nearly 20% of the world’s oil and gas supply passes through this chokepoint. It serves as the main export route for oil from Gulf nations such as Saudi Arabia, Iraq, Iran, Kuwait, UAE, and Qatar.

India imports around 5.5 million barrels of crude oil per day, out of which approximately 2 million barrels transit via the Strait of Hormuz. A closure of the strait could therefore disrupt a significant portion of India’s energy supply in the short term.

However, energy analysts and government officials have downplayed the risk of an immediate crisis, citing the country’s ongoing efforts to diversify its oil sources. Over the past few years, India has ramped up imports from countries such as Russia, the United States, and Brazil, whose supply routes bypass the Strait of Hormuz.

On the gas front, India’s key supplier Qatar primarily ships LNG through alternative routes, and other major suppliers like Australia, Russia, and the US are geographically unaffected.

Though India may avoid a supply shock, analysts caution that global crude prices are likely to react. In early trading hours, markets signaled a sharp rise, with prices expected to touch or exceed USD 80 per barrel in the near term, driven by uncertainty and supply disruption fears.

Experts warn that while India’s diversified import strategy offers some cushion, a prolonged shutdown could eventually exert upward pressure on inflation, fuel prices, and trade balances.

If Iran follows through with its threat, the impact could ripple across global energy markets. Asian economies, which now consume a larger share of Gulf oil than Western nations, are expected to bear the brunt of any disruption.

The situation remains fluid, and diplomatic channels are reportedly being activated to prevent further escalation.

International stakeholders are likely to increase pressure on Iran to refrain from military action that could destabilize global trade. Meanwhile, Indian authorities are monitoring developments closely and may consider releasing strategic reserves or fast-tracking alternate import arrangements if the situation deteriorates.