Why the Strait of Hormuz Is Important (and What It Means for India)
The Strait of Hormuz is a narrow sea passage between Iran and Oman that connects the Persian Gulf to the Arabian Sea. It is the world’s most important oil chokepoint: about 20 million barrels of oil a day, roughly 20% of global oil consumption, passed through it in 2024, along with about a fifth of the world’s LNG trade. Any disruption there moves oil prices worldwide, and India is among the countries most exposed.
Why the Strait of Hormuz matters
- Volume: more than a quarter of all oil traded by sea passes through it (US Energy Information Administration, EIA).
- Few alternatives: the Gulf’s big producers have limited pipeline routes around it, so most of their exports must go by sea through the strait.
- LNG: almost all of Qatar’s LNG exports, about a fifth of global LNG trade, go through it.
Countries that depend on it
Exporters
Saudi Arabia (the largest, about 38% of the crude flows in 2024), Iraq, the UAE, Kuwait, Iran and Qatar all ship oil or gas through the strait.
Importers
According to the EIA, 84% of the crude and 83% of the LNG moving through Hormuz in 2024 went to Asia. China, India, Japan and South Korea together took 69% of the crude flows. Europe and the US take a much smaller share, but they still feel the effect through global prices.
Bypass routes
| Pipeline | Route | Capacity |
|---|---|---|
| East-West (Petroline) | Saudi Arabia to the Red Sea port of Yanbu | 5 million b/d (briefly expanded to 7 million in 2019) |
| Abu Dhabi Crude Oil Pipeline | UAE to Fujairah, outside the strait | 1.8 million b/d |
| Goreh–Jask | Iran to the Gulf of Oman | About 0.3 million b/d |
The EIA estimates only about 2.6 million b/d of this capacity is unused and available in a disruption. That’s a small fraction of normal flows.
What happened in 2026
In early 2026, conflict in the region disrupted shipping through the strait. The EIA reported that Gulf producers had shut in about 7.5 million barrels a day of output by March, and Brent crude averaged about $103 a barrel that month. Traffic later resumed, but the EIA’s September 2026 outlook still assumed some export constraints through the end of 2026, with Middle East output below pre-conflict levels until the second quarter of 2027. For how prices reacted, see why crude oil prices rise or fall.
Impact on India
- Crude oil: India imports close to 90% of its crude. Much of it comes from Iraq, Saudi Arabia, the UAE and Kuwait, whose shipments pass through Hormuz.
- LPG and LNG: most imported LPG comes from Gulf countries, and Qatar is India’s largest LNG supplier. Cooking gas and city gas supply are directly exposed.
- Prices and the rupee: higher oil prices raise the import bill, feed inflation and weaken the rupee. In 2026 the government also raised gold import duty to save foreign exchange (see what affects gold prices).
- Shipping and trade: freight and insurance costs rise for all cargo using Gulf routes, and exports to the region are hit.
- Remittances: millions of Indians work in the Gulf, so a prolonged conflict affects jobs and money sent home.
How India reduces the risk
- Diversifying suppliers: buying more from Russia, the US, Africa and Latin America, whose cargoes don’t use Hormuz.
- Strategic Petroleum Reserves: underground crude storage at Visakhapatnam, Mangaluru and Padur, run by ISPRL, for emergencies.
- Commercial stocks: refiners and oil companies hold their own inventories.
Frequently asked questions
Why can’t tankers just take another route?
The Persian Gulf has only one sea exit, and Hormuz is it. The only alternatives are the pipelines above, which can carry only a small part of normal volumes.
Which country controls the Strait of Hormuz?
It lies between Iran to the north and Oman (the Musandam peninsula) to the south. International shipping uses designated lanes through it.
Related guides
Sources: EIA: Strait of Hormuz remains critical oil chokepoint, EIA (Apr 2026), EIA Short-Term Energy Outlook, ISPRL, PPAC.