US-Israel-Iran War: If Strait Of Hormuz Gets Shut, What Will Be Its Impact On India & Other Countries?

Amidst the trio war between the US and Israel against Iran, the Middle East is in a kaboom. The US-Israel duo hit Iran where it hurts the most, toppling the commanding leaders of the Islamic Republic country, with Ali Khamenei being the most prominent death during the weekend. Enraged and vengeful, Iran has retaliated hitting US assets, bases, troops and ships in the Red Sea.

Talking about the sea, the Strait of Hormuz, one of the world's most strategically important choke points for global oil and gas trade, is back in the limelight.

What Is Happening In Strait Of Hormuz?

Right after the US launched its airstrikes against Iran, attention had already shifted towards the Strait of Hormuz, a key passage between the Persian Gulf and the Gulf of Oman for global trade.

Choking Strait of Hormuz matters to the global economies, including India as well. And as expected, reports have flooded in that the traffic at Hormuz plummeted significantly, while Danish container shipping giant Maersk has declared a temporary shutdown of the movement of its vessels crossing the Strait of Hormuz.

A Reuters report said that Iran's Revolutionary Guards have blocked passage through the Strait of Hormuz. A European Union naval mission, Operation Aspides, received radio messages of warnings that no ships are allowed to pass the Hormuz. Meanwhile, the US has also requested commercial ships to avoid the Gulf after they attacked Iran.

With tensions rising by the minute, a new report has claimed that a Palau-flagged oil tanker, Skylight, was hit off the coast of Oman about five nautical miles north of Khasab Port in Musandam Governorate. Oman shares borders with the strait. Four crew members are reported to be injured, while 15 Indian crew members were evacuated. All 20 crew members were evacuated safely.

Meanwhile, Iran's finance minister Abbas Araghchi told Al Jazeera that Iran was not planning to close the Strait of Hormuz at the moment. He said, "We have no problem with the countries on the other side of the Persian Gulf; we have friendly relations and good neighbourly relations with all of them and we are determined to continue to these relations."

However, he added that the attacks in the sea is Iran's self defence against the American aggression on them.

When will the tensions between the US, Israel and Iran end, the trajectory is grimmer than expected. And as long as these three countries clash, the Hormuz passage will remain the biggest elephant in the room that could hurt the global economy.

"The simmering tensions between the United States, Israel, and Iran escalated sharply on February 28, 2026, significantly affecting global energy security and economic stability. Direct military engagements in and around the Strait of Hormuz disrupted vital oil shipments, driving crude prices higher and intensifying volatility across international financial markets," said Dr. Manoranjan Sharma, Chief Economist at Infomerics Ratings.

If the Strait of Hormuz is shut, oil markets in the world will take a brutal hit. And that would be bad news for oil companies and crude oil imports and exports.

How Does a Strait Of Hormuz Shutdown Impact the world?

Explaining in detail, Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA said, the Strait of Hormuz remains a critical global energy choke point, with nearly 20% of global petroleum liquids and 20% of global liquefied natural gas (LNG) shipments transiting through the route.

" As Iran and several Middle East energy producers straddle the Strait of Hormuz, any escalation in regional conflict could impede energy shipments through this corridor," said Vasisht.

Any attack on oil and gas production facilities of other major Middle East producers would further aggravate supply concerns. This could spiral crude oil prices significantly.

As per Vasisht, crude oil prices have already increased from approximately USD 65 per barrel to USD 72-73 per barrel over the past few days, reflecting the build-up of geopolitical tensions in the region.

Accordingly, a prolonged and/or widening conflict involving multiple oil and gas producers and disruption at the Strait of Hormuz could adversely impact global crude oil and LNG supplies, potentially leading to a further rise in global energy prices.

How Will India Be Impacted?

For India, Vasisht said, "the risks are significant."

Notably, in FY2025, half of India's crude oil imports and 54% of LNG imports were routed through the Strait of Hormuz.

"While Indian refiners may be able to source crude oil from alternate locations such as the United States, Africa and South America, elevated energy prices could result in a higher import bill," Vasisht said.

Additionally, he said, sustained high crude oil prices are expected to moderate marketing margins and the profitability of oil marketing companies.

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