Washington/Beijing: The United States has called on China to use its influence to dissuade Iran from going ahead with plans to block the Strait of Hormuz, a vital maritime chokepoint through which about 20% of the world’s oil supply passes daily. The appeal comes amid growing fears that any disruption in this narrow waterway could trigger a surge in global oil prices and destabilise already fragile energy markets.
The US Secretary of State Mark Rubio urged Beijing to intervene diplomatically, warning that the closure of the strait would amount to “economic suicide” for China, given its heavy reliance on oil imports that transit through this strategic corridor, reported the BBC. The call for action follows a vote in Iran’s parliament backing a proposal to block the strait, escalating tensions in the region.
“The closure of the Strait of Hormuz would not only hurt the global economy but would disproportionately affect nations like China that depend heavily on this route for their energy security,” Rubio said, as quoted by the BBC.
Global energy markets are already reacting nervously to the development, with analysts warning that any blockade could drive crude oil prices above $100 per barrel, increase insurance premiums for shipping, and disrupt global trade.
Impact On India and Other Energy-Dependent Nations
The potential closure of the Strait of Hormuz would have severe consequences for India, which imports over 80% of its crude oil needs, with a significant portion of these supplies passing through the strait. A blockade would not only push up fuel prices in India but could also widen the country’s current account deficit, strain its foreign exchange reserves, and fan inflation.
For a fast-growing economy like India, where energy security is critical for sustaining industrial production and transportation networks, any disruption in oil supply routes would have a cascading effect on growth, fiscal stability, and household budgets. Experts caution that higher oil prices could lead to increased subsidies on fuels, placing additional burden on government finances.
Other nations such as Japan, South Korea, and several European countries would also face supply shocks and price spikes, compounding economic challenges at a time of global uncertainty.
