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Iran has officially closed the strategically vital Strait of Hormuz, issuing a stern warning to oil vessels attempting to pass through the narrow corridor.
Iranian officials told state media that the waterway is shut and cautioned that any ships attempting transit would face direct action from the Revolutionary Guards and the regular navy.
The Strait accounts for nearly 20 per cent of the world’s daily oil consumption.
At its narrowest point, it measures about 33 kilometres, or 21 miles, in width. It serves as a critical passage connecting major oil producers, Saudi Arabia, Iran, Iraq and the United Arab Emirates, to the Gulf of Oman and the Arabian Sea.
Analysts say oil markets have reacted nervously, amid concerns that a prolonged conflict could severely disrupt global energy supplies and destabilise one of the world’s most crucial energy corridors.
The closure, however, follows US and Israeli strikes on Iran targeting its leadership. In retaliation, Iran launched multiple missile barrages at Gulf states, further heightening tensions across West Asia.
Crude oil prices rose 1 per cent in early trade on Tuesday after surging more than 10 per cent on Monday when markets reopened amid escalating hostilities.
Shipping costs have also climbed sharply. Reports indicate that shipowners are demanding more than $200,000 per day for liquefied natural gas tankers in the Atlantic Basin, nearly double previous rates.
The spike came after Qatar halted LNG production as the conflict began spilling across the region.
The developments carry significant implications for India, which imports nearly 90 per cent of its oil requirements.
In FY25 alone, India imported oil worth $160 billion.
US Response
The United States has stated it has a plan to counter rising oil prices and safeguard global shipping lanes as it continues strikes aimed at weakening Iran’s missile and naval capabilities.
US Secretary of State Marco Rubio said markets were responding to events in the region but maintained that Washington had anticipated the fallout.
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