June 7 – The ongoing United States-Israel military campaign against Iran, which began on February 28, 2026, has transformed the Strait of Hormuz into a major flashpoint with far-reaching implications for global energy security, trade, and economic stability.
What started as targeted military strikes has evolved into a broader confrontation that threatens one of the world’s most critical maritime chokepoints. The conflict—dubbed Operation Epic Fury by the United States and Operation Roaring Lion by Israel—has disrupted oil and gas shipments through the Persian Gulf, triggering volatility across global energy markets and raising concerns about the resilience of international supply chains.
The crisis intensified after coordinated US and Israeli strikes targeted Iranian military and strategic installations across several provinces. The attacks reportedly resulted in the death of Iran’s Supreme Leader Ayatollah Ali Khamenei and several senior military commanders, prompting a forceful response from Tehran.
Iran has retaliated with missile and drone attacks targeting Israel, US military installations in the Gulf, and commercial shipping vessels operating in the region. The Islamic Revolutionary Guard Corps (IRGC), including its naval forces, has reportedly targeted cargo ships and deployed naval mines near the Strait of Hormuz.
In response to the growing instability, the International Energy Agency (IEA) took the unusual step of urging member states to draw on strategic petroleum reserves. Brent crude prices have surged beyond $100 per barrel, reflecting mounting concerns over supply disruptions.
Iran has vowed to prevent oil shipments benefiting the United States and its allies from passing through the Strait while allowing passage for selected neutral or friendly nations. Meanwhile, Iranian President Masoud Pezeshkian has outlined three conditions for ending hostilities: recognition of Iran’s legitimate rights, payment of war reparations, and guarantees against future military aggression.
The Strait of Hormuz remains one of the world’s most strategically important waterways. Located between Iran to the north and Oman and the United Arab Emirates to the south, the narrow passage connects the Persian Gulf to the Arabian Sea and serves as a vital artery for global energy trade.
Approximately 20 percent of global seaborne oil trade and a similar share of global LNG exports transit the strait annually. An estimated 16 to 17 million barrels of oil and petroleum products move through the waterway every day, while more than 3,000 vessels pass through it each month.
Although alternative export routes exist—including Saudi Arabia’s East-West Pipeline and the UAE’s Fujairah pipeline network—their combined capacity falls far short of replacing the volumes normally transported through Hormuz. As a result, sustained disruption could create a significant supply deficit in global oil markets.
The situation could deteriorate further if Yemen’s Houthi movement expands its involvement and targets the Bab al-Mandab Strait, another critical maritime chokepoint linking the Red Sea to the Gulf of Aden.
Bab al-Mandab handles roughly 12 percent of global oil trade and serves as a key route for commercial shipping between Europe, Asia, and Africa. Any disruption would force vessels to reroute around the Cape of Good Hope, adding substantial costs, delays, and logistical challenges.
A simultaneous disruption of both the Strait of Hormuz and Bab al-Mandab would represent an unprecedented shock to global trade and energy markets, creating a “double chokepoint” crisis with severe consequences for the world economy.
The economic repercussions are already being felt.
Oil prices have exceeded $100 per barrel, with analysts warning they could rise substantially higher if the conflict persists. LNG prices have climbed sharply in key Asian markets, while shipping companies face longer voyages, increased fuel consumption, and soaring insurance premiums.
The impact extends beyond energy markets. Fertiliser supplies have come under pressure, threatening agricultural production and food security, particularly in developing economies that rely heavily on imports from the Gulf region.
At the geopolitical level, the involvement of Iran-aligned groups such as Hezbollah and the Houthis has increased the risk of a wider regional conflict, further complicating efforts to restore stability.
Among major economies, India is particularly vulnerable to prolonged disruption in the Persian Gulf.
Nearly half of India’s crude oil imports, more than two-thirds of its LNG supplies, and the vast majority of its LPG imports transit through the Strait of Hormuz. Any sustained interruption would affect energy security, industrial production, transportation, fertiliser manufacturing, and household fuel supplies.
Higher energy costs would place additional pressure on inflation, widen India’s trade deficit, and increase operating costs across multiple sectors. The country could also face reduced remittances from the more than nine million Indians working in Gulf countries if regional economies slow down.
India has responded by intensifying diplomatic engagement with Tehran and securing safe passage for several Indian-flagged vessels through the strait. New Delhi has also sought to strengthen its strategic petroleum reserves while exploring alternative sources of supply.
Beyond energy, Iran remains central to India’s broader strategic interests, including access to Central Asia through the Chabahar Port and the International North-South Transport Corridor, both viewed as important counterweights to China’s Belt and Road Initiative.
The crisis shows little sign of an immediate resolution. Without sustained diplomacy and credible international mediation, the conflict risks becoming a prolonged geopolitical confrontation with significant consequences for global energy security and economic stability.
As uncertainty persists in the Strait of Hormuz, governments, businesses, and financial markets will continue to grapple with the possibility of prolonged disruption to one of the world’s most important maritime corridors. The longer the conflict endures, the greater the risk of wider regional involvement and deeper economic consequences for countries far beyond the Middle East.