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On February 16, Iran’s Islamic Revolutionary Guard Corps began a new round of military exercises in the Strait of Hormuz, according to state media.
The drills, launched on the eve of talks with the United States, were aimed at preparing for “potential security and military threats” in the strait, state television said, after Washington deployed a significant naval presence in the region.
The announcement has once again drawn significant attention to one of the world’s most critical energy chokepoints, a narrow maritime corridor whose stability underpins global oil flows and, by extension, the international economy. It could also increase the price of goods and services globally, and hit some of the biggest economies, including China, Japan and India, which are some of the biggest importers of crude oil through the strait. Especially for countries like India which are mainly dependent on energy imports, what happens in this narrow corridor has direct consequences.
In the past, Iran has threatened to close the strait, which would restrict trade and affect global oil prices, but has never followed through on the threat.
Both strategically and geographically, the Strait of Hormuz is one of the most important oil chokepoints in the world. It lies between Oman and the UAE on one side and Iran on the other. It links the Persian Gulf in the north with the Gulf of Oman to the south, and the Arabian Sea beyond.
At its narrowest, it is just 33 km wide. The designated shipping lanes within it are only about 3km in each direction separated by a buffer zone.
Despite its modesty in width, the strait is one of the most strategically important waterways in the world. Every day, enormous volumes of tankers carrying crude oil, petroleum products and liquefied natural gas (LNG) pass through it. According to the U.S. Energy Information Administration (EIA), roughly 17–20 million barrels of oil and petroleum liquids transit the strait daily, which is close to 20% of global petroleum consumption.
Members of OPEC (Organization of the Petroleum Exporting Countries), which are Saudi Arabia, Iran, the UAE, Kuwait and Iraq, export most of their crude via the strait, mainly to Asia. Qatar, one of the world’s largest LNG exporters, also sends most of its gas exports through this route.
Hence, the EIA classifies Hormuz as the world’s most important oil chokepoint, a narrow channel along a critical global sea route where even temporary disruption can have far-reaching consequences, including substantial supply delay and sharp increase in energy prices.
Strategically sensitive
The strategic importance of the strait has long made it a flashpoint. The geographical location of the strait gives Iran considerable leverage in the region. Its coastline runs along the entire northern side of the passage, and the narrowness of the shipping lanes means that the commercial vessels that pass through it must come in close contact to the Iranian waters. This has turned the Hormuz into a recurring hotspot during periods of regional tensions in the past.
During the Iran-Iraq war of the 1980, both countries targeted oil tankers and commercial vessels in what came to be known as the “tanker war”. Naval mines were deployed and shipping lanes were temporarily disrupted. The attacks drew in external powers like the U.S. which escorted the tankers through the strait to ensure free flow of oil. Since then, Iran has repeatedly threatened to close the strait during periods of heightened regional tensions and confrontations with the U.S. and its allies. However, it has never followed through on a full closure.
Even during last year’s 12-day war with Israel, where the country along with the U.S. carried out strikes on major Iranian nuclear and military facilities, Tehran did not move to shut the waterway, according to The Associated Press. This restraint reflects a complex reality. While blocking the strait would exert pressure on oil importing countries, and give a straight leverage to Iran, a full blockade would also harm Iran’s own oil exports and likely provoke a broader international military response.
Few alternatives
Unlike some other global chokepoints, the Strait of Hormuz has very few practical alternatives. Some Gulf countries have invested in limited overland pipeline routes to bypass Hormuz. Saudi Arabia operates the East-West pipeline to the Red Sea, and the UAE has a pipeline to the port of Fujairah outside the Gulf. However, these routes do not have the capacity to fully replace the volumes that transit the strait daily. For most exporters in the Persian Gulf, the strait continues to be the main gateway to international markets. The absence of credible alternatives is what makes Hormuz especially vulnerable.
As a result, even a partial disruption, whether due to military escalation, mines, missile threats, or tanker seizures, can drive up shipping insurance costs and freight rates. Global oil markets react immediately to any sign of instability in the strait, which often leads to an increase in oil prices merely on expectations.
Even a minor disturbance in the Strait of Hormuz will have a profound impact on big economies around the world.
According to the U.S. EIA, roughly 82% of crude oil and condensate that passes through the strait went to countries in Asia in 2022. China, India, Japan and South Korea together accounted for roughly two-thirds of these flows. Therefore, a sustained disruption would hit major Asian economies particularly hard.
A sudden spike in oil prices would drive inflation across the globe. Especially for India, instability in the strait will have profound economic impacts immediately.
For India, which is a net importer of crude oil, more than 40% of its oil supplies come from Gulf countries that use the Strait of Hormuz for these oil exports. Any minor disruption in this region would likely increase global crude prices, in turn leading to an increase in the prices of domestic petrol, diesel and LPG.
Latest tensions
The recent Iranian military exercises and naval drills were conducted in the midst of heightened regional tensions and the presence of U.S. naval assets in the area. Military drills in the strait, or in the vicinity, are often interpreted as signals, or threats, demonstrating the capability of Iran during diplomatic stand-offs. While a full closure is still unlikely because of the economic and military risks involved, the simple possibility of disruption is enough to increase global oil prices. In a complex and interwoven international economy, which is already strained by various geopolitical conflicts and fragile supply chains, the Strait of Hormuz represents a pivotal vulnerability.
The strategic relevance and importance of the Strait of Hormuz is immense, and its stability is vital for global economic strength and security. For India and other major economies around, what happens in this narrow oil chokepoint is not distant geopolitics but a direct determinant of energy costs, inflation, and economic stability.
Published – February 21, 2026 06:14 am IST
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Why the Strait of Hormuz remains central to global energy security
