The Strait of Hormuz — one of the world’s most vital maritime routes — is back in the news after fresh tensions between Iran and Israel. Recently, Iran’s parliament approved a bill authorizing the potential closure of this critical sea passage. While not yet fully implemented, the threat alone has already sent shockwaves through global trade and energy markets.

Why is this so important? Because one-fifth of the world’s crude oil passes through this narrow waterway every single day — along with key exports like chemicals, liquefied natural gas (LNG), fertilizers, agricultural products, and general cargo.

For a country like India, which imports a large share of its oil and trades heavily with Gulf countries, any disruption here could have serious consequences — from fuel inflation to export delays to rising logistics costs.

In this blog, we’ll break down the full picture:
✅ Latest Strait of Hormuz news
✅ What products & countries will be most affected
✅ How it impacts India’s oil imports and export trade
✅ What Indian businesses should do now to prepare

Why the Strait of Hormuz Is Critical for Global Trade

The Strait of Hormuz is a narrow stretch of water — just 33 km wide at its narrowest point — located between Iran and Oman. It connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. This is the only sea passage from the Persian Gulf to global markets.

Here’s why it matters so much:

  • Around 20% of global oil exports — nearly 20 million barrels per day — transit through Hormuz.
  • About 25% of global LNG exports also move through this strait.
  • Countries like Saudi Arabia, UAE, Qatar, Kuwait, and Iran rely heavily on Hormuz to ship their energy exports to Asia, Europe, and beyond.
  • Key Asian economies — especially India, China, Japan, and South Korea — are highly dependent on oil and gas passing through this route.
  • There are limited alternative pipelines — and these cannot fully replace sea shipping through Hormuz.

In simple terms — any disruption here can trigger global supply chain chaos, energy price spikes, and inflation.

Strait of Hormuz News: Current Situation (June 2025)

As of June 2025, here’s the latest Strait of Hormuz news:

  • Iran’s parliament has approved a bill authorizing closure of the Strait in response to military strikes on Iranian facilities.
  • The final decision is pending approval by Iran’s Supreme National Security Council — so, for now, the Strait remains open but under risk.
  • Global oil prices have already reacted — with Brent crude jumping to $78–80 per barrel — with forecasts predicting a surge to $100–150 if an actual closure happens.
  • Some oil tankers have already started rerouting or delaying passage due to rising insurance premiums and security concerns.
  • The U.S. Navy’s Fifth Fleet, along with allied forces, is maintaining a strong presence in the region to deter any military escalation.

Key takeaway: The situation is volatile — a full blockade isn’t here yet, but even the threat is disrupting trade and driving up costs.

How This Affects Global Exports & Imports

Oil & LNG: The Biggest Impacted Sector

  • Oil is clearly the #1 product at risk here.
  • 20 million barrels/day of oil pass through Hormuz — that’s ~20% of global demand.

India’s dependency:

  • India imports about 2 million barrels/day through Hormuz.
  • That’s roughly 60–65% of India’s total crude oil imports.
  • Gulf countries like Saudi Arabia, Iraq, UAE, Kuwait, and Qatar are key suppliers.

Any blockage or delay means:

  • Oil prices will soar → driving up petrol, diesel, LPG prices in India.
  • Import bills will skyrocket — widening India’s trade deficit.

The Indian rupee could weaken due to the higher demand for dollars to pay for more expensive oil.

Global impact:

  • Asian markets (China, Japan, S. Korea) will also be hit hard.
  • Europe will face rising costs due to energy supply chain pressures.

Chemicals & Petrochemicals

The second big category affected is chemicals & petrochemicals.

Products like fertilizers, plastics, lubricants, solvents are all linked to oil supply and pricing.

Rising oil prices will increase input costs for many industries:

  • Automotive
  • Construction
  • Agriculture (due to fertilizers)
  • Packaging and consumer goods

Indian exporters of petrochemicals may face:

  • Disrupted supply chains
  • Higher shipping and insurance costs
  • Volatile raw material prices

Agricultural Exports

India exports significant amounts of Basmati rice, spices, and other agri-products to Iran and Gulf countries.

In FY 2024–25, India exported nearly 855,000 tonnes of Basmati rice to Iran, worth ₹6,300 crore+.

Exporters are already facing:

  • Delayed payments from Iranian buyers (up to 8-month delays reported).
  • Pakistan gaining market share via barter trade (since Iran faces banking restrictions).
  • Potential delays or cost hikes if shipping is disrupted.

Other products at risk:

  • Spices, nuts, pulses, sugar
  • Indian agri exporters will need to watch this closely.

General Container Cargo

General container shipping through Gulf ports will also feel the impact:

  • Delays: Tankers & cargo ships rerouting → longer transit times.
  • Insurance premiums: War-risk insurance is already rising.
  • Freight costs: Higher freight rates will hit exporters and importers in India & globally.

Sectors affected:

  • Electronics
  • Consumer goods
  • Industrial machinery
  • Apparel and textiles shipped via Gulf ports

What Will Happen in India If the Strait of Hormuz Closes?

If Iran actually implements the closure of the Strait of Hormuz, here’s what Indian businesses and the economy will face:

Fuel Inflation

  • Petrol, diesel, LPG prices will shoot up — as 60–65% of India’s crude oil imports come through Hormuz.
  • Even a temporary blockade could spike oil to $120–150/barrel, according to analysts.
  • Higher fuel costs will affect transport, shipping, aviation, and logistics across industries.

Indian Economy Slowdown Risk

  • The import bill will rise sharply, worsening India’s current account deficit.
  • The rupee may weaken against the dollar due to higher oil import payments.
  • Rising fuel and transport costs will drive inflation in consumer goods and services.
  • GDP growth could slow if the disruption continues.

Impact on Indian Exporters

Exporters of agriculture, chemicals, and consumer goods may face:

  • Higher shipping costs
  • Longer transit times
  • Payment delays (especially from Iran & some Gulf buyers)

Small & mid-sized exporters are more vulnerable due to thinner margins.

Impact on Importers & Manufacturers

  • Industries heavily reliant on oil-linked inputs (plastics, lubricants, petrochemicals) will see rising costs.
  • Sectors like fertilizers, automotive, construction materials may need to adjust pricing and sourcing.

What Should Indian Exporters & Importers Do Now?

While a full closure hasn’t happened, exporters & importers should prepare proactively:

✅ 1. Stay Updated

  • Track daily Strait of Hormuz news from reliable global sources.
  • Watch oil price trends and shipping updates.

✅ 2. Review Contracts

  • Add force majeure clauses to cover risks from geopolitical disruptions.
  • Negotiate flexible delivery schedules with buyers.

✅ 3. Secure Insurance

  • Get war-risk insurance where needed.
  • Review existing marine and cargo insurance policies.

✅ 4. Manage Inventory

  • Build buffer stocks for key raw materials and inputs.
  • Exporters should pre-plan stock for markets most likely to be disrupted.

✅ 5. Diversify Shipping Routes

  • Where possible, explore alternate shipping lanes.
  • Engage with logistics partners to plan contingency routes.

✅ 6. Monitor Payments

  • Stay alert for payment delays from Iran or other Gulf importers.
  • Work with banks to manage forex risk.

Conclusion

The Strait of Hormuz remains one of the most critical maritime routes for the world — and especially for India.

Right now:

  • The threat of closure is real — but not yet fully implemented.
  • Oil prices and shipping rates are already reacting.
  • Exporters and importers must stay prepared for short-term shocks — and potentially longer disruptions if tensions escalate.

With smart planning — reviewing contracts, managing risks, securing insurance — Indian businesses can weather this situation better.

Stay tuned to Strait of Hormuz and keep your export-import strategies flexible during this volatile period.

Note: Some data in this article has been compiled based on publicly available information and research from Google and trusted news sources.