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Traffic near the Strait of Hormuz: Renewed tensions between the US and Iran, and the resulting unrest in the Middle East, have once again halted the movement of ships through the Strait of Hormuz as of Thursday.

Strait of Hormuz: Ship movement through the Strait of Hormuz has been disrupted amidst US military strikes on 80 Iranian targets and Iran's threats of retaliation. According to a Bloomberg report, traffic has come to a complete standstill on this maritime route, which is critical for energy shipping. Reports indicate that dozens of large oil tankers and LNG vessels traversing this route have been halted mid-journey near the Gulf of Oman.

Ship movement at Hormuz halted.

The situation deteriorated recently following missile attacks on a Qatari LNG tanker and a Saudi Arabian crude oil tanker passing through the Strait. The US held Iran responsible and launched airstrikes on more than 80 of its coastal targets. Following this escalation between the two nations, the US Navy and maritime security agencies warned that navigating this route posed a risk to vessels.

In light of these warnings from maritime security agencies, many ships are now opting to travel via the 'Cape of Good Hope' route around Africa. This alternative path will add 10–15 days to the journey time. The disruption in shipping has also caused maritime insurance rates for oil companies to surge by up to 400%, which is expected to impact crude oil supplies.

Impact on India

India imports approximately 85% of its crude oil requirements from abroad. Of this total, around 60% reaches India via the Strait of Hormuz. Amidst this tense atmosphere, if tankers carrying oil and gas from Saudi Arabia, Iran, and the UAE are halted en route, the country could once again face a shortage of energy supplies. If the current supply situation at the Strait of Hormuz persists for the next 10–15 days, it could impact petrol and diesel prices in the near future. Additionally, the rising cost of gas imports would affect the prices of CNG and PNG.