Iran parliament reportedly backs closure of oil transit channel
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Israel-Iran War: The significance of Strait of Hormuz that Iran threatens to block after US strikes – explained
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Iran has long threatened to choke the Strait of Hormuz – a chokepoint between Iran and Oman. Iran’s Supreme National Security Council must make the final decision on whether to close the Strait of Hormuz, Iran’s Press TV said on Sunday, after parliament reportedly approved the ‘closure’ proposal. Iranian lawmaker and Revolutionary Guards Commander Esmail Kosari told journalists that doing so is on the agenda and ‘will be done whenever necessary.’
Earlier, soon after the military strikes by its long-time foe, the United States, Hossein Shariatmadari, the Iranian Supreme Leader Ali Khamenei’s representative, reportedly called for immediate retaliation, including closing the Strait of Hormuz to American, British, German, and French ships.
Where is the Strait of Hormuz? The Strait of Hormuz is a strait between the Persian Gulf and the Gulf of Oman. It provides the only sea passage from the Persian Gulf to the open ocean and is one of the world’s most strategically important choke points. The Strait serves as the primary export route for Gulf producers such as Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait.
This Strait allows about 20 per cent of the world’s daily oil consumption—around 20 million barrels—to pass through it.
The Strait has been at the heart of regional tensions for decades, and recently, attacks have occurred near it and targeted alternative routes for oil bypassing Hormuz, news agency Reuters said.
Recently, President Trump blamed Iran for the June 12 attacks on two oil tankers at the entrance to the Gulf despite Tehran’s denials, stoking fears of a confrontation in the vital oil shipping route. On July 19 Iran’s Revolutionary Guards said they had captured a British-flagged oil tanker in the Gulf after Britain seized an Iranian vessel on July 4.
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At present, approximately 50 large oil tankers are attempting to navigate out of the Strait of Hormuz, according to the media reports. Iran’s fresh threat after US strikes has raised concerns about how disruptive a conflict in the Gulf could be for the global oil trade.
Impact on India? So what if Iran closes the Strait? How will it impact India? The Strait links the Persian Gulf to the Indian Ocean. Any blockade would drive the oil price up and cause inflation.
Over two-thirds of India’s oil imports and nearly half of its liquefied natural gas (LNG) imports transit through the Strait of Hormuz. Of the 5.5 million barrels of oil India consumes every day, 1.5 million pass through the waterway.
“If Iran closes the Strait of Hormuz, India will definitely suffer. About 20 per cent of the world’s crude oil and 25 per cent of the world’s natural gas flow through these,” Foreign Affairs Expert Robinder Sachdev told news agency ANI.
India will suffer because oil prices will go up, inflation will rise, and there is an estimate that for every ten-dollar increase in the price of crude oil, india’s GDP will suffer by 0.5 per cent, he said.
India’s readiness? Union Minister Hardeep Puri said earlier this week that India plans to source crude oil from outside the Persian Gulf and to cut its own refined‑product exports, as a potential blockage of the Strait looms.
“We have enough diversified supplies of crude, and even if there were to be a disruption, we can source it from alternative suppliers,” Puri, the Union Minister of Petroleum and Natural Gas, told NDTV
“I don’t think this is something we are unduly worried about,” he added. Ample crude is available on the global market, so the concern is not supply but price, the Minister said.
India’s Oil exports? India is a net exporter of petroleum goods, with refiners such as Reliance Industries Ltd. and Nayara Energy shipping to countries such as the United Arab Emirates, Singapore, the US and Australia. The crisis could reduce those shipments if needed to maintain sufficient stockpiles at home.
India’s product exports have averaged 1.3 million barrels a day so far this year, with Reliance and Nayara dominating the industry with 82 per cent of shipments, Bloomberg reported.
Has the Strait ever been closed? The Strait has never been closed, despite apprehensions that its closure in the past would disrupt the global oil supply.
Experts said that while there might be a temporary disruption in maritime traffic, Iran might refrain from choking the Strait of Hormuz, as it will affect its friends more than its enemies.
“There are three significant reasons why Iran might not actually do so, even while signalling that it might do so rhetorically. First, it will hurt Iran’s friend, China, the world’s second-largest economy, and Iran’s largest trading partner. China, is the number one importer of oil, accounting for nearly three-quarters of its oil export,” Shweta Singh, who teaches at the Faculty of International Studies at the South Asian University, wrote in Mint recently.
So China, will not like to see any disruption in its maritime oil shipments, and might actually use its economic leverage with Iran to prevent Iran from the closure of the narrow lane, she said
“Second, it will rupture Iran’s relationship with Oman (which owns the southern half of the strait) and the Gulf Cooperation Council (GCC States). With Oman, careful crafting of a relationship has resulted in greater dependency for Iran on a wide range of issues,” Singh added.
Iran’s two biggest oil export clients? During the Iran–Iraq War in the 1980s, the two countries engaged in what is called the ‘ Tanker War’. Tehran targeted Kuwaiti and Saudi tankers, as Iraq retaliated with missile strikes.
The US launched Operation Earnest Will to protect Kuwaiti oil tankers from Iranian attacks during the Iran-Iraq War. It was a key part of the larger ‘Tanker War’ and involved the largest maritime convoy operation since World War II. This oil war led to a hike in prices across the world, but still, the Strait remained open.
“Third, domestically this might not work for the interest of the regime, as any economic hits or closure of its oil exporting terminal, will see a surge in prices, and fuel popular discontent, which might impact both regime stability, and reformist tendencies for Iranian President Masoud Pezeshkian,” Singh wrote.
Steven Schork, Schork Group principal and editor, told Bloomberg, that he does not think Iran will close the Strait of Hormuz because it would hurt India and China, two of their biggest oil export clients.
If Iran closes the Strait of Hormuz, India will definitely suffer. About 20 percent of the world’s crude oil and 25 percent of the world’s natural gas flow through these.
In 2011-2012, Iran again threatened to close the Strait in response to European and US sanctions against its oil exports and banking system. The then-Iranian Vice President Mohammad Reza Rahimi warned of a complete shutdown if oil sanctions were enforced. The Strait, however, was not closed.
Likewise, in 2019, when the US withdrew from the Iran nuclear deal and tensions soared, apprehensions of closure gripped the globe yet again. But despite severe escalation, the Strait remained functional.
Israel-Iran conflict LIVE: Israel says struck ‘dozens’ of sites in Iran
U.S. President Donald Trump made the remarks from the White House. He said the strikes on Iranian nuclear sites were a ‘spectacular military success’ Trump also thanked Israeli Prime Minister Bibi Netanyahu for his country’s support. He also said that Iran must now make peace or there will be tragedy for Iran. The strikes were carried out on Fordo, Natanz and Isfahan, Iran’s main nuclear sites. The U.S.-led strikes were conducted in response to Iran’s nuclear program. The Iranian government has denied that it had any nuclear weapons. The United States and its allies carried out the strikes in support of Israel’s military campaign against Iran’s nuclear facilities in the region. The attack was carried out by the US military with the help of the Israeli military.
Trump’s remarks in full after U.S. strikes Iran
Here is the full address by U.S. President Donald Trump from the White House after the strikes on Iranian nuclear sites:
“A short time ago the U.S. military carried out massive precision strikes on the three key nuclear facilities in the Iranian regime: Fordo, Natanz and Isfahan.
“Everybody heard those names for years as they built this horribly destructive enterprise.
“Our objective was the destruction of Iran’s nuclear enrichment capacity and a stop to the nuclear threat posed by the world’s number one state sponsor of terror.
“Tonight, I can report to the world that the strikes were a spectacular military success.
“Iran’s key nuclear enrichment facilities have been completely and totally obliterated.
“Iran, the bully of the Middle East, must now make peace. If they do not, future attacks will be far greater and a lot easier.
“For 40 years, Iran has been saying, ‘Death to America, Death to Israel.’
“They have been killing our people, blowing off their arms, blowing off their legs, with roadside bombs. That was their specialty, we lost over 1,000 people.
“And hundreds of thousands throughout the Middle East and around the world have died as a direct result of their hate, in particular, so many were killed by their general Qasem Soleimani.
“I decided a long time ago that I would not let this happen. It will not continue.
“I want to thank and congratulate Prime Minister Bibi Netanyahu. We worked as a team like perhaps no team has ever worked before, and we’ve gone a long way to erasing this horrible threat to Israel.
“I want to thank the Israeli military for the wonderful job they’ve done.
“And most importantly, I want to congratulate the great American patriots who flew those magnificent machines tonight and all of the United States military on an operation the likes of which the world has not seen in many, many decades.
“Hopefully we will no longer need their services in this capacity. I hope that’s so.
“I also want to congratulate the chairman of the Joint Chiefs of Staff, General Dan ‘Razin’ Caine, spectacular general, and all of the brilliant military minds involved in this attack.
“With all of that being said, this cannot continue. There will be either peace or there will be tragedy for Iran far greater than we have witnessed over the last eight days.
“Remember, there are many targets left. Tonight’s was the most difficult of them all, by far, and perhaps the most lethal.
“But if peace does not come quickly, we will go after those other targets with precision, speed and skill. Most of them can be taken out in a matter of minutes.
“There’s no military in the world that could have done what we did tonight, not even close. There has never been a military that could do what took place just a little while ago.
“Tomorrow, General Caine, Secretary of Defense Pete Hegseth, will have a press conference at 8 am at the Pentagon.
“And I want to just thank everybody, and in particular, God. I want to just say we love you, God, and we love our great military, protect them.
“God bless the Middle East, God bless Israel, and God bless America. Thank you very much. Thank you.”
– AFP
Can Iranian parliament’s approval lead to closure of Strait of Hormuz? Here’s all we know
A fifth of the global oil and gas supply flows through the Strait of Hormuz. It connects the Persian Gulf to the Arabian Sea and the Indian Ocean. Iran’s supreme national security council will make the final decision on the move. The decision to close the strait is not yet final. Notably, Iran has never blocked the Strait, amid any war or conflict. The UK Maritime Trade Operations (UKMTO) said it was assessing the threat to US commercial shipping in the Red Sea and Gulf of Aden, near Iran, as “high.”
Major General Kowsari, member of the National Security Commission of the Parliament was quoted by state media Press TV saying, “Parliament has reached the conclusion that the Strait of Hormuz should be closed, but the final decision in this regard lies with the Supreme National Security Council. Earlier, Iran’s foreign minister Seyed Abbas Aragchi, when asked by reporters about Hormuz, said simply that “a variety of options are available with Iran”.
Last Sunday, lawmaker and Revolutionary Guards Commander Esmail Kosari told the Young Journalist Club on Sunday that shutting the Strait of Hormuz is on the agenda and “will be done whenever necessary.” The UK Maritime Trade Operations (UKMTO) said it was assessing the threat to US commercial shipping in the Red Sea and Gulf of Aden, near Iran, as “high.”
Meanwhile, Maersk confirmed that its vessels continues to sail through the Strait of Hormuz but added that the company was ready to re-evaluate this based on available information, as per Reuters. “We will continuously monitor the security risk to our specific vessels in the region and are ready to take operational actions as needed,” the Danish container shipping company said.
US enters Iran-Israel war
In a major escalation of tensions in West Asia, the US bombed three nuclear sites – Fordow, Natanz and Esfahan – in Iran and warned the Islamic Republic of more “precision strikes” if it did not end its conflict with Israel. This came days after the US president said that he would decide within ‘two weeks’ if he needs to bomb Iran. The US strike came on the ninth day of Operation Rising Lion, under which Israel hit several nuclear facilities inside Iran, killing top military officials and nuclear scientists. The Israel Defence Forces said that US strikes “were in coordination with the IDF” and it was a “crucial step stopping the Iranian regime’s aggression.”
UPDATE: Return of Red Sea cargo “less likely” after attacks on Iran
Major ocean container lines are less likely to return to the Red Sea/Suez Canal route, analysts say. There were no immediate reports of attacks on commercial shipping by Iran after Israel attacked nuclear targets there Thursday. But industry observers warned that could change amid rising tensions in the region.
There were no immediate reports of attacks on commercial shipping by Iran after Israel attacked nuclear targets there Thursday. But industry observers warned that could change amid rising tensions in the region.
Published reports said Iran’s parliament was considering closing the Strait of Hormuz to vessel traffic, in an effort to put economic pressure on Israel and its allies. The narrow maritime passage between Iran and Oman serves as the trade gateway for global container traffic and 20% of the world’s crude oil supply moving via tankers from the Persian Gulf. The waterway was last closed in 1984 during the Iran-Iraq war.
“Any closure of the Strait of Hormuz would see services re-routed, with increased reliance on India West Coast ports for connecting the Far East to Indian sub-continent,” said Peter Sand, chief analyst with Xeneta, in a research note. “The inevitable disruption and port congestion, as well as the potential for higher oil prices, would cause a spike in ocean freight container shipping rates, with carriers likely also pushing for a ‘security surcharge’ on these trades in the coming days.