After Hormuz, Iran threatens to close 3 more sea routes:Critical waterways’ closure may impact India’s imports of Russian oil fertilizer

Iran has recently threatened to close three of the world’s most vital international waterways if US President Donald Trump doesn’t allow ships coming from Iranian ports to sail through the Strait of Hormuz. The three shipping routes which Tehran has threatened to close are Red Sea, Gulf of Oman and Persian Gulf. For India, these are like the lifelines of her domestic economy. If these routes are blocked, the impact on India might be visible right from the price of petrol at the pump to the cost of smartphones. Here is a breakdown of why these routes matter so much to India. 1. How much India is dependent on these routes? India’s trade is mostly sea-dependent. Unlike some countries that can transit goods by trains or trucks across borders, India relies on ships for the vast majority of her international businesses. The Persian Gulf: This is India’s energy lifeline. Over 20% of India’s crude oil imports and a massive 60% of its Liquefied Natural Gas (LNG) pass through this narrow waterway. The largest country in South Asia exports and imports commodities with countries like Kuwait, Bahrain, Qatar, Kuwait, etc near the Persian Gulf. The Gulf of Oman: This acts as the waiting room for ships that would enter or exit the Persian Gulf. Ships have to transit via the Strait of Hormuz to enter the Persian Golf from the Gulf of Oman. Any trouble here acts as a bottleneck for all traffic coming from or going to our western neighbours. The Red Sea: This is the gateway to the West. About one-third of India’s total exports sail through the Red Sea and the Suez Canal to reach Europe and the East Coast of the US. 2. What India imports? If these routes close, India won’t just face delays. But, rather, she would face shortages of essential goods. Here is what the nation imports through these water ways: India currently imports nearly 5 million (50 lakh) barrels of oil every single day. About 20% of that comes through the Strait of Hormuz alone.
India, which imports about 90% of its crude oil requirements, had recently increased its purchases of Russian crude over the past two months. Imports from Russia reached 1.98 million barrels per day in March According to data from intelligence firm Kepler, crude oil imports from Russia averaged 1.98 million or 19.8 lakh barrels per day (bpd) in the month of March. This was the highest level since June 2023. 3. Closure of 3 routes may shoot-up inflation When a shipping route is threatened, it doesn’t even have to close completely for the damages to be caused. First, insurance premiums for ships would increase. Shipping companies would pass these costs on to the customers (which in this case would be the Indian importers). Second, ships would be forced to take the longer route via the Cape of Good Hope. This would add 2 to 3 weeks to the voyage timeline. For India, a sustained closure could push oil prices up. Experts suggest that for every $10 (₹930) increase in the price of a barrel of oil, India’s import bill goes up by roughly $15 billion (₹1.39 lakh crore). This would lead to widening of India’s current account deficit, putting pressure on the Indian rupee. India’s growth is fueled by trade with West Asia. While, the government has taken steps to diversify sources of oil purchases but the Red Sea and the Persian Gulf remain irreplaceable. A closure would not just be a political headline; it would be a direct hit to the Indian households’ wallet, affecting everything from transportation cost to the manufacturing cost of daily goods. Albeit, looking at friendly relations between India and Iran, it is highly unlikely that the latter would also block passage of Indian vessels through these routes as in the case of the Strait of Hormuz.