US-Israel strikes on Iran reignite Hormuz fears; oil shipments suspended, India on alert

Tensions in the Middle East have flared sharply after US-backed Israeli strikes on Iran on Saturday, bringing renewed global focus on the Strait of Hormuz, one of the world’s most critical energy chokepoints. 

US President Donald Trump followed through on his threat to attack Iran after diplomatic talks failed to secure an agreement to curb Tehran’s nuclear programme. In response, Iran is widely seen as weighing options for retaliation, including a potential move to block or effectively close the Strait of Hormuz. 

The narrow waterway at the mouth of the Persian Gulf handles nearly a quarter of the world’s seaborne oil trade. Any attempt by Iran to deny access to oil and gas tankers bound for China, Europe, the US and other major energy-consuming nations could send crude prices soaring and destabilise the global economy. Oil prices had already touched a six-month high in February amid speculation that Washington could order military strikes. 

Oil firms halt some shipments 

According to Reuters, several oil majors and leading trading houses have suspended crude oil and fuel shipments through the Strait of Hormuz amid escalating US and Israeli strikes and Tehran’s retaliation, citing four trading sources. 

“Our ships will stay put for several days,” a senior executive at a major trading desk told Reuters. The development underscores mounting concerns over the safety of maritime traffic in the region. 

However, maritime flows have not stopped entirely. Bloomberg, citing naval observers, reported that while some tankers have paused operations, others continue to transit the strait. 

Ship-tracking data showed that at least three liquefied natural gas (LNG) tankers travelling to or from Qatar have halted voyages to avoid the waterway. Qatar accounts for roughly 20% of global LNG supply, and its exports must pass through the strait to reach buyers in Asia and Europe. 

At the same time, automated vessel signals indicated that at least 17 oil tankers were still moving in both directions through the waterway. 

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Why the Strait of Hormuz matters 

The Strait of Hormuz links the Persian Gulf to the Indian Ocean and lies between Iran and Oman’s Musandam exclave. At its narrowest point, it is about 50 km (30 miles) wide and in some stretches no deeper than 60 metres (200 feet), making it highly vulnerable to military disruption. 

Given the volume of oil and gas that passes through it daily, even partial disruption could have far-reaching consequences for global energy markets. 

Impact on India 

For India, the stakes are significant. Analysts warn that any blockade or prolonged disruption could threaten a substantial portion of the country’s crude oil imports, many of which transit through the Strait of Hormuz. 

A closure of the strait could affect as much as 50% of India’s monthly total oil imports, they said. In 2024-25, India’s imports from Iran stood at $0.44 billion, while exports to the Middle Eastern nation were valued at $1.24 billion. Key Indian exports to Iran include basmati rice, tea, sugar, fresh fruits and pharmaceuticals. Imports from Iran include apples, pistachios, dates and kiwi. 

While direct trade with Iran remains relatively limited, the broader geopolitical escalation could also affect India’s growing trade ties with Israel, as well as energy security amid rising oil price volatility. 

With tensions escalating and tanker movements under scrutiny, global markets are likely to remain on edge as developments unfold around one of the world’s most strategically vital waterways.