The escalating Iran-Israel conflict has once again turned global attention towards the Strait of Hormuz, a narrow yet vital maritime passage that handles a significant portion of the world’s oil and gas shipments. As tensions rise, questions are being raised about the potential for Iran to block this strategic chokepoint. What makes the Strait so critical to global trade, and does Iran truly have the capacity, or willingness, to shut it down?

What is Strait of Hormuz

The Strait of Hormuz is a narrow channel between Iran and the Omani Musandam Peninsula. It is around 30 miles wide at the narrowest point and connects the Persian Gulf to the Gulf of Oman. The Strait of Hormuz is deep and free of maritime hazards. The depth of the Strait is greatest near the Musandam Peninsula.

Commercial traffic through the Strait moves through the designated Traffic Separation Scheme (TSS) north of the Musandam Peninsula. However, the water is deep enough to accommodate larger ships to pass through an Inshore Traffic Zone south of the Omani island of Didimar. In this area, the Strait is over 650 feet deep. But often, restrictions are imposed on smaller vessels considering peacetime situations. Before 1979, the ITZ was the main shipping channel through the Strait.

There are eight major islands in the Strait, out of which seven are controlled by Iran. There is conflict of ownership of Abu Musa, Greater Tunb and Lesser Tunb islands between Iran and the United Arab Emirates because of their strategic locations. Since the 1970s, Iran has maintained military presence on these islands. Furthermore, Iran’s navy has access to open sea from bases at Chah Bahar, Bandar Abbas and Bushehr. Because of the control on these strategic islands, Iran has strong influence in the waters of the Strait.

Human habitation is not possible on the Iranian Gulf coast because of the arid and unbearably hot climate. However, because of the oil fields in the region, some development has taken place. July and August are the hottest months in the region. Dust, morning fog and haze can affect visibility in the Strait. During the summer months, dust haze is common on the southern coast of Iran.

Geopolitical and economic significance of Strait of Hormuz

The Strait of Hormuz holds significance because of its strategic location as it lies between Oman and Iran, linking the sea passage from the countries on the Gulf, including Kuwait, Iraq, Saudi Arabia, Qatar, United Arab Emirates and Bahrain, with the Arabian Sea and beyond.

According to a report by Mint, 20 million barrels pass through the Strait of Hormuz every day, apart from oil products shipments. It accounts for around 1/5th of global oil shipments and 1/3rd of the world’s liquefied natural gas (LNG). The US Energy Information Administration estimates that around 20% of the global oil consumption flows through the Strait.

Due to its strategic importance, the maritime sea lanes are watched by the US Navy’s Fifth Fleet based in Manama, Bahrain. Any disruptions in the Strait of Hormuz, even if temporarily closed, will send shocks to the global oil market.

Will Iran shut the Strait of Hormuz

As Israel has struck Iran’s nuclear programme establishments and military, Tehran has threatened to shut the Strait of Hormuz. Now the question is, will Tehran actually shut it to use it as a bargaining chip? While Iran may consider a temporary blockade to gain some leverage, the possibility of a full-scale shutdown of the Strait of Hormuz is scarce.

There are several reasons for Iran not going for a full-scale shutdown even if it is threatening to do so in theory. First of all, Iran and China have good relations. China is the number one importer of oil and accounts for around three-quarters of Iran’s oil exports. If the Strait of Hormuz is closed, shipments to China will be affected. In fact, there is a possibility that China may use its imports from Iran to force Tehran not to block the pathway.

Furthermore, closure of the Strait of Hormuz will have a direct impact on Iran’s relations with Oman and the Gulf Cooperation Council. Oman has always advocated for freedom of navigation in the sea passage. Iran would not want to create any rift with Oman, as it controls the southern half of the Strait. Also, Iran has difficult relationships with GCC states. Any risk of fallout with them would be avoided.

If the external factors are not to be considered, internally as well, it will be economically devastating for Iran as it will surge prices, leading to regime instability. Iran is already facing a lot of internal conflict. Any step that can lead to economic displeasure among the people will lead to catastrophic results for the regime.

Not to forget, in 1980 and 1988, when war broke out between Iran and Iraq, both countries targeted commercial vessels in the Gulf. Despite the attacks on the shipments, the Strait of Hormuz was not completely shut.

Importance of Strait of Hormuz for India

A closure or disruption in the Strait of Hormuz would spell trouble for India. Nearly 70% of its crude oil and almost 40% of its LNG imports pass through this route, with Qatar alone supplying nearly 10 million tonnes of LNG in 2024. Any blockage could severely impact energy security and prices. Additionally, India faces a diplomatic dilemma, having close ties with both Israel and Iran. With Chabahar port and the IMEC corridor already stalled due to rising tensions, India’s strategic and energy interests now hang in delicate balance amidst the worsening Israel-Iran standoff.

Notably, in 2024, India and Iran signed a 10-year pact over Chabahar, allowing India to manage the port for one decade. In 2016, during Prime Minister Narendra Modi’s visit to Iran, an agreement for Chabahar was inked. When Iran’s president, Hassan Rouhani, paid a visit to India in 2018, the prospect of expanding India’s role at the port was extensively discussed.

Chabahar Port and its significance for India and Iran

Chabahar, located near the mouth of the Gulf of Oman, is Iran’s first deep-water port. The port positions the country on the international oceanic trade route map. The port is located to the west of Iran’s border with Pakistan, around the same distance as Gwadar, a competitive port designed by China in Pakistan to the east.

India’s engagement in the port’s construction began in 2002, when Hassan Rouhani, then National Security Advisor of Iran, met with then-Indian NSA Brajesh Mishra.

Chabahar is strategically important for both Iran and India. It has the potential to aid Tehran in avoiding the adverse impacts of Western sanctions, while also providing New Delhi with an alternative route that avoids Pakistan, which blocks India’s land access for trade with Afghanistan and Central Asia.

India intends to use Chabahar Port as a transit hub along the International North-South Transport Corridor (INSTC) to connect with the Commonwealth of Independent States nations. INSTC will help India to reduce cargo movement between India and Central Asia, with Chabahar Port serving as a regional commercial transit gateway. Notably, INSTC is a 7,200-kilometre multi-mode freight transportation project connecting India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.

Chabahar Port to serve as a counterbalance to Pakistan’s Gwadar Port and China’s BRI

China’s Belt and Road Initiative is a global trade and infrastructure plan patterned on the old Silk Road, which linked imperial China and the West.

Over the years, despite China’s best efforts, India has refused to support its Belt and Road Initiative (BRI) since the China-Pakistan Economic Corridor (CPEC) violates India’s sovereignty and territorial integrity, as it passes through the Pakistan-occupied Kashmir (PoK).

As tensions in West Asia continue to rise, the Strait of Hormuz remains a strategic chokepoint with global ramifications. While Iran’s threats to shut the passage serve as a powerful geopolitical tool, a complete blockade appears unlikely due to diplomatic, economic and regional consequences. For energy-dependent nations like India, the situation underscores the need for diversified energy sources and robust strategic partnerships. The world now watches closely, aware that any disruption here could trigger a global crisis.