How Could US Alleged Hormuz Blockade Impact India's Economy

US President Donald Trump has threatened to close off the Strait of Hormuz after negotiations between Washington and Tehran held in Pakistan failed to materialise into a long-term peace agreement during the weekend.

"Effective immediately, the United States Navy, the finest in the world, will begin the process of blockading any and all ships trying to enter, or leave, the Strait of Hormuz," Trump said on his Truth Social platform.

"At some point, we will reach an 'all being allowed to go in, all being allowed to go out' basis, but Iran has not allowed that to happen," he added.

Trump's announcement came just hours after India received its first shipment of Iranian oil in nearly seven years, as tensions persist over the narrow sea route.

The continued US hostilities against Iran and potential Us enforcement of blockade on the Strait of Hormuz may have a cascading effect on India's energy security, with New Delhi facing both crude and gas supply disruptions from the Gulf region.

"The escalation may present a serious and complex threat to India, particularly in terms of energy security, economic stability, and geopolitical standing," Preeti Khenta, an Associate Fellow at the geopolitical think tank Usanas Foundation, told Sputnik India.

Approximately 60-65% of India's crude oil imports pass through the Strait of Hormuz, and any blockade could lead to rising oil prices and supply shortages, she added.

Disruptions here also impact fertiliser imports, petrochemicals, and India's exports to West Asia, which could result in slower economic growth and a trade imbalance, the analyst explained.

"In the event of any disruption, India may experience economic shocks and long-term strategic adjustments," Khenta underlined.

She suggested that a blockade, with the US obstructing Iranian exports, could unleash an extreme and immediate shock on the global oil market, far surpassing the impact of a typical disruption. Panic-driven pricing could push oil prices to an estimated $150–$200 per barrel. This would amount to a significant physical supply shock, given that approximately 20 million barrels per day transited the strait pre-war, the strategic affairs specialist noted.

The US stance complicates matters for all countries dependent on this narrow passage for their energy needs, retired Commodore Seshadri Vasan, an Indian Navy veteran and an international relations commentator, told Sputnik India. The blockade is also against any laws of the seas enshrined in the United Nations Convention on the Laws of the Seas (UNCLOS) of 1982, he added.

However, it is not going to be easy for the US to impose the blockade because Iran is not going to sit quietly, Vasan underscored. So, any effort by their warships or other ships to intervene in the traffic towards Iranian ports, which is considered their lifeline, would be dealt with by some kind of missiles, drones, or mines from Tehran, he asserted.

"This would come in the way of India's aspirations to maintain a robust GDP growth. Therefore, there would be a phenomenal amount of challenging options that would be available to India. New Delhi has diversified its sources from 21 to 41 in terms of sourcing petroleum products, yet it would be a work in progress all through till there is some final solution to what has been initiated by the US and Israel vis-a-vis Iran," the commentator summed up.

US to Impose Blockade on All Maritime Traffic In and Out of Iranian Ports Starting April 13: Trump

13 April, 11:38