Why the Strait of Hormuz matters to India amid Israel-Iran tensions.
As Israel and Iran continue to launch missile and drone attacks on each other, there is growing concern that Iran could restrict or block access to the Strait of Hormuz—something it has threatened in the past. Even the fear of this happening can send shockwaves through oil markets and disrupt global trade.
Military tension also puts commercial ships at risk. Insurance premiums go up, companies reroute vessels, and shipping delays become more likely.
“The extent to which global powers can dissuade Iran from blocking this vital passage will determine the scale of impact on oil markets going forward. Even without further escalation, the geopolitical risk premium on oil is likely to persist,” said Ankit Patel, Partner at Arunasset Investment Services.