Strait of Hormuz Closure by Iran β Location, Importance & Impact on Global Energy for UPSC, APPSC, TGPSC and other state PSC exams
Why in News?
Iran announced a temporary closure of parts of the Strait of Hormuz to conduct live-fire naval exercises. The move has raised concerns over global energy supply and maritime security.
Strait of Hormuz:
Strait of HormuzΒ is narrow waterway separatingΒ IranΒ (north) from theΒ Musandam PeninsulaΒ (an exclave ofΒ Oman) and theΒ United Arab EmiratesΒ (south).
- World’s Most Vital Chokepoint: It is the only sea passage from the Persian Gulf to the open ocean.
- Energy Lifeline: ApproximatelyΒ 20-25% of the worldβs seaborne oilΒ andΒ 20-30% of global Liquefied Natural Gas (LNG)Β pass through it daily.
- Major Exporters: Key OPEC members likeΒ Saudi Arabia, Iraq, Kuwait, UAE, and IranΒ rely on it to export crude.Β Qatar, the world’s leading LNG exporter, sends nearly all its LNG through this strait.Β
Significance for India
- Energy Security: India is highly dependent on this route, as nearlyΒ 40% of its crude oil importsΒ andΒ 54% of its LNG importsΒ pass through the strait.
- Economic Impact: Any disruption leads to immediate spikes in global oil prices, impacting India’sΒ Current Account Deficit (CAD)Β and fueling domesticΒ inflation.
