Strait of Hormuz: Fueling the world, Steering Tensions

SYNOPSIS

The Strait of Hormuz, vital for global oil trade, channels 20% of worldwide shipments. India relies heavily on it but is diversifying suppliers and boosting reserves to ensure energy security amid potential disruptions.

Strait of Hormuz: A vital maritime route driving global energy supply and geopolitical tensions.

The Strait of Hormuz is a narrow water channel connecting the Persian Gulf to the Arabian Sea. It is only 21 miles wide at its widest point between Iran and Oman. The size of the Strait is small, but the Strait of Hormuz is enormous in energy supplies globally that affects millions of people worldwide.

Why This Waterway Matters

The Strait of Hormuz is responsible for about 20% of all oil shipments worldwide. The strait also carries a considerable quantity of liquefied natural gas (LNG) trade. Every day, oil tankers traverse this narrow channel, transporting energy from Middle Eastern countries to markets in Asia, Europe, and beyond.

The waterway is the primary route for gulf oil exports from major Gulf countries. Oil passing through this strait helps stabilize energy prices around the globe; if anything impacts this pathway, it can quickly push oil prices up; rising prices can affect everything from the cost of fuel to transportation.

India's Energy Connection

For India, the Strait of Hormuz is very important. About 2 million barrels of oil per day pass through this waterway to reach India. This represents roughly 36% of India's total daily oil imports. Most of this oil comes from countries like Iraq, Saudi Arabia, the UAE, and Kuwait.

India depends heavily on imported oil, bringing in about 90% of its crude oil from other countries. The country also imports half of its natural gas, with over 50% of its LNG coming through the Strait region. This makes India quite dependent on this small waterway for its energy needs.

India's Smart Planning

However, India has been working to reduce this dependence. The country has increased its oil suppliers from 27 countries in 2006-07 to 39 by 2021-22. Today, Russian oil makes up over 40% of India's total oil imports, compared to less than 1% before 2022.

India also gets oil from the United States, Brazil, and West Africa. These supplies use different shipping routes that do not pass through the Strait of Hormuz. This diversification helps protect India from supply problems.

The country keeps strategic oil reserves that can last 9-10 days, while oil companies maintain several weeks of commercial reserves. India is also investing in renewable energy, electric vehicles, and domestic oil exploration to reduce its import needs.

Looking Forward

The Strait of Hormuz remains important for global energy security. While it presents challenges due to its strategic location, countries like India are preparing for potential disruptions through careful planning and diversification. This approach helps ensure stable energy supplies even during uncertain times.

Understanding this waterway's role helps us see how geography affects global economics and why energy security matters for every nation.

Dhairya Mehta