Oil prices to jump as Iran officially closes Strait of Hormuz

New Delhi, March 3:  With Iran officially closing the Strait of Hormuz with a stern warning to oil ships, crude oil pices are expected to soar further in coming days.

Iranian officials told the state media that the Strait of Hormuz is closed and if anyone tries to pass, “the heroes of the Revolutionary Guards and the regular navy will set those ships ablaze”.

The strait handles about 20 pr cent of the world’s daily oil consumption. At its narrowest point, it is about 33 kilometres (21 miles) wide.

It connects major oil producers — Saudi Arabia, Iran, Iraq and the United Arab Emirates — to the Gulf of Oman and Arabian Sea.

According to analysts, oil markets have reacted nervously, fearing that a prolonged conflict could disrupt global supplies and destabilise one of the world’s most energy-critical corridors.

The closure of Strait of Hormuz follows US and Israeli strikes on Iran aimed at toppling its leadership. In retaliation, Iran launched multiple missile barrages at Gulf states.

Meanwhile, shipowners are asking more than $200,000 a day for liquefied natural gas (LNG) tankers in the Atlantic Basin, almost double the price, as per reports. The surge followed Qatar’s shutdown of LNG production as the conflict with Iran began to spill across the wider region.

Crude oil prices were up 1 per cent higher in early trade on Tuesday. On Monday, prices had surged over 10 per cent as markets reopened amid escalating conflict in West Asia.

Notably, crude prices are significant for India, which imports nearly 90 per cent of its oil requirement. In FY25, India imported oil worth $160 billion.

The United States said it has a plan to counter rising oil prices and protect global shipping lanes as it presses ahead with strikes aimed at crippling Iran’s missile arsenal and naval power.

Secretary of State Marco Rubio said at the US Capitol that markets were reacting to events in the region but insisted Washington had anticipated the fallout.

—IANS