19th June 2025 (12 Topics)
2
Jun
3
Jun
4
Jun
5
Jun
6
Jun
7
Jun
9
Jun
10
Jun
11
Jun
12
Jun
13
Jun
14
Jun
16
Jun
17
Jun
18
Jun
19
Jun
20
Jun
Oil Price Surge
Context
Tensions between Israel and Iran in June 2025 have led to a spike in global oil prices, with Brent crude futures rising nearly 9% amid fears of potential disruption in oil supplies, especially through the Strait of Hormuz—a key global oil transit chokepoint. Concerns have intensified due to Iran’s repeated threats to block this strategic waterway.
1. Strait of Hormuz: A Global Oil Lifeline
- It is a narrow chokepoint that connects the Persian Gulf to the Arabian Sea, bordered by Iran, Oman, and UAE.
- Around 20 million barrels/day of oil passed through it in 2024, accounting for ~20% of global petroleum liquids consumption.
- Major exporters using the Strait include Saudi Arabia, UAE, Kuwait, Qatar, Iraq, and Iran.
2. Impact of Disruption
- Closure of the Strait would lead to:
- Supply delays
- Higher freight and insurance costs
- Spike in global oil prices
- India, importing over 80% of its crude oil, would face elevated import bills even though it does not import directly from Iran due to U.S. sanctions.
3. India’s Preparedness and Risks
- India has diversified its oil import basket, reducing dependency on a single region.
- However, any sustained price rise may:
- Hurt India Inc’s profitability
- Increase import bill and inflation
- Delay private investment and reduce GDP growth
- ICRA’s projected GDP growth of 6.2% may face downward revision in case of persistent uncertainty.
More Articles
Courses
Study
Notes
Home
Resources
More
