Iran will not close Hormuz Strait:Petrol diesel prices may still increase by ₹4-5/litre; gold expected to rise by ₹30,000/10 gm

Iran’s Foreign Minister Abbas Araghchi has said that there is currently no intention to close the Hormuz waterway. A day earlier, when Iran’s Supreme Leader Ayatollah Ali Khamenei was killed in a US attack, there were concerns that Iran might close the Hormuz. If Hormuz had closed, crude oil prices could have risen from $70 per barrel to $120 per barrel. This could have affected petrol-diesel prices in India. However, experts still believe that the risk of increase in crude oil prices remains. There are three reasons for this… 1. Oil Tanker Attacks: While Iran may not officially close the Hormuz Strait, it could attack oil tankers. Recently, three ships were attacked at the mouth of the Persian Gulf. After these attacks, tanker companies are avoiding this route. If this ongoing war with Israel and America drags on, such attacks may continue. This will make shipping companies afraid to use that route and even though the path remains technically open, crude supply will be disrupted and prices will rise. 2. Insurance and Shipping Costs: During war-like conditions, risks on sea routes increase. Because of this, the ‘war risk insurance’ and shipping freight for crude oil carriers becomes more expensive. This increased cost ultimately drives up crude oil prices. 3. Market Panic: The global market always operates on future apprehensions. Until tensions in the Middle East completely subside, crude oil prices may remain high. Now let’s understand its impact on common man: 1. Petrol-diesel prices in India may increase by ₹4-₹5 Petrol Diesel: In Delhi, petrol price could rise from ₹95 per liter to ₹100. While diesel could go up from ₹88 to ₹92. Prices may increase similarly in other cities as well. Earlier when news of Hormuz closure came, experts were estimating that crude oil prices could reach $120 per barrel. And petrol could reach ₹105. Now after Iran’s Foreign Minister’s statement, experts are estimating crude oil to reach $100. Based on this, the estimated increase in petrol-diesel rates has been slightly reduced. India imports 80% of its oil needs. Of this, about 50% crude comes through the Hormuz route. Experts believe that if this route is completely or partially blocked, the supply of crude oil in the international market will decrease and crude oil prices will increase. Companies are free to change prices, but final decision rests with government In India, petrol-diesel prices are determined by government oil companies. They depend on the average price of crude oil in the international market over the last 15 days and the status of rupee against the dollar. However, companies set the base price. A large portion of the final price reaching the common man consists of taxes from central and state governments. In other words, oil companies are free to increase prices, but in reality the final decision depends on the government’s stance. Whenever war-like situations arise, the government can suggest companies not to increase prices to maintain political and economic stability, or can reduce taxes itself to prevent the burden of increased prices from falling on the public. 2. Gold-Silver: According to commodity expert Ajay Kedia, gold can rise from Rs 1.60 lakh per 10 grams to Rs 1.90 lakh. Silver is at Rs 2.67 lakh per kilo which can rise to reach Rs 3.50 lakh. During wartime, investors consider ‘gold’ as safe. 3. Stock Market: According to Manoranjan Sharma, Chief Economist at Infometrics Ratings, on February 28, 2026, tensions suddenly escalated significantly between America, Israel, and Iran. This has had a severe negative impact on global energy security and economic stability. Sharma said the market is expected to open lower on Monday and significant volatility can be expected. The market may see a decline of about 1-1.5% in the short term. This will put pressure on automobile, banking-finance, and FMCG sectors. During times of war-like tension, investors withdraw money from the market and invest in safe havens. Investors put money in physical gold or gold bonds. Now know about the Strait of Hormuz… The Strait of Hormuz is approximately 167 km long waterway that connects the Persian Gulf to the Arabian Sea. Both its entrances are about 50 km wide, while the narrowest part is about 33 km wide. It has a designated 3 km wide shipping lane for incoming and outgoing maritime traffic. 20% of the world’s petroleum passes through here. Apart from Iran, countries like Saudi Arabia, Iraq and Kuwait also depend on this for their exports. More than 10% of India’s total ‘non-oil exports’ are supplied through this route. This includes basmati rice, tea, spices and engineering goods. Approximately 17.8 million to 20.8 million barrels of crude oil and fuel pass through this route daily. Iran itself exports 1.7 million barrels of petroleum daily through this route. Iran will also suffer losses if Hormuz closes After the death of the Supreme Leader, the Iranian army is considering several options for retaliation. This includes targeting US military bases and attacking Israeli territories. However, Iran’s biggest ‘geopolitical weapon’ is closing the Strait of Hormuz. This can put pressure on the world’s economy. However, closing the Strait of Hormuz could also destroy Iran’s own economy as it won’t be able to export its oil. Additionally, China is Iran’s biggest oil buyer. If supply is disrupted, relations with China could deteriorate. Saudi Arabia has the ‘East-West Pipeline’ As an alternative to the Strait of Hormuz, Saudi Arabia has the ‘East-West Pipeline’. This 746-mile-long pipeline runs from one end of the country to the other end (Red Sea Terminal). It can transport 5 million barrels of crude oil daily. India and other Asian countries are keeping an eye on such alternative routes and secure reserves. India increasing oil imports from other countries The government is already preparing to deal with this potential crisis. According to sources, India is increasing oil purchases from suppliers outside the Gulf countries. Additionally, if needed, India can also draw oil from its ‘Strategic Petroleum Reserve’ (SPR).