Strait of Hormuz Blockade: A Flashpoint for Global Recession

Global Fear Amid U.S. Attacks on Iran’s Nuclear Sites

The way America attacked Iran’s nuclear sites in history, you will see a fear-like situation not only in the Middle East but in the whole world. The delay is that in the end, this Israel-Iran war, in which America has also jumped. In which direction will it move? I mean, what can come from that?

Iran’s Significant Decision: Strait of Hormuz Closure

Now you can see that Iran has made a significant decision. Let me tell you this will have an enormous profitable consequence. America has called it profitable self-murder because Iran’s congress has approved the closure of the Strait of Hormuz. Since the war started, there has been a lot of discussion about the Strait of Hormuz, which I’ll tell you about in the videotape. Iran’s congress has decided to close it, meaning it has given authorisation.

International Reaction and U.S. Involvement

You can see the news Iranian Parliament Approves the end of the Strait of Hormuz, USA Asks China to intervene. So, in the middle of this whole matter, America also wants China to help them. China should intervene so that this profitable self-murder being committed by Iran doesn’t happen. I’ll tell you the complete analysis of what can come next.

Understanding the importance of the Strategy of Hormuz

Neighbouring Geopolitical Region

Incremental from this, Iraq’s border also touches them. Along with the Persian Gulf, there are Kuwait, Bahrain, Qatar, and Saudi Arabia. There are the UAE and Oman. Now look precisely. Numerous people make the mistake of saying that this State of Homogen is between the UAE and Iran. This isn’t so. However, the small home of Oman, this part of the home belongs to Oman only, if you look closely. So the State of Hormuz is actually between Oman and Iran.

Strategic Maritime Route

And which two bodies does it connect? It connects both of them. It connects both of them. And why is it strategic? Because a large part of the world’s oil and gas passes through this particular route. Now, if this route is closed, you can understand how big a deficit can be, there can be a problem with oil painting and gas, and you can see that it’s said that 20 to 30 per cent of global oil painting passes through this particular route.

Qatar’s Role and Export Dependence

Qatar, the world’s largest natural gas producer, is also decorated, so there is a large natural gas. So their import also happens from then. Extremely, from this, you’ll understand how important it becomes. Great exporters watch Saudi Arabian Peninsula, UAE, Iraq, Kuwait, and Qatar are fully subject to this peculiar road. Because if this route closes, exports can then suffer a major reversal. And it’s only 21 navigational long hauls wide. That means the narrowest point of the Strait of Hormuz is only 21 navigational long hauls.

Iran’s Rationale for Closing the Strait

Retaliation Against U.S. Airstrikes

That means you can understand that Iran is saying that Iran’s congress has approved that you can block the Strait of Hormuz whenever you want. So the question that arises then is, why did Iran take this decision?

The first thing is that the air strike carried out by the US is a kind of crossing of the red line for Iran. Iran had easily said that if the US takes any similar step, it will cross the red line, and we will do a huge retribution. You can see that you must have been hearing about B-2 bombers throughout history. They’ve tried to destroy the Fado installation then, which was veritably important for Iran, by piercing it and bombing it.

Assassination Attempts and Domestic Turmoil

Piecemeal from this, it’s also being said that attempts are being made to kill Ayatollah Khamenei, the supreme leader of Iran. Now he has to hide in a cellarage then. He’s living in the cellarage. But you’ll understand that again, this is a big reason why Ran took this decision.

Possible Withdrawal from NPT

Secondly, what’s then’s that Iran may be trying to gesture in a way that we can withdraw from NPT, which is anon-proliferation convention of which India isn’t a part yet, so Iran can abdicate from its class then, this will also come an important thing and nearly there will be an attempt to weaponize the nuclear program by Iran.

Pressure from the IRGC

Also, secondly, what’s that their army IRGC, and the hard liners in Iran are pushing that you should take an aggressive stance. Meaning, the way America has attacked, Iran shouldn’t remain silent then, and this is a veritably aggressive move, which I’ll tell you further about latterly.

Global Implications of Strait Closure

Sovereign Rights and Economic Weaponisation

A story to prevent the shape of Hormuz. An attempt is being made to block it. And at the same time, Iran wants to show a view that it’s our autonomous right to open and close this state. It’s our autonomous right under which we can do all these effects.

Massive Economic Repercussions

Now, the question is, if the Strait of Hormuz is closed, what will be its counteraccusation? The first is profitable weaponisation. It means that 1 trillion bones worth of oil paintings and gas are traded every time. So that will be fully disintegrated. A massive effect will come then because you can understand that the oil painting prices can increase to 50,$ 200, or anywhere if it’s closed.

Impact on Inflation and Global GDP

Due to this, it’s egregious that when the oil painting prices increase so much, inflation is bound to be, and if inflation comes presto, it can impact your GDP. So numerous effects can be.

Violation of International Maritime Law

Besides this, transnational law is being violated. The UN Convention on the Law of the Sea does not allow you to blockade this water body, and Iran is also a signatory to this. But it says that we are doing this in self-defence.

Military Flashpoint: The Role of U.S. Navy

Strategic U.S. Military Presence in Bahrain

Then the third military flash point here. I mean the US Navy’s Fifth Fleet. I will show it to you. If you look at this map of the Persian Gulf, you will see Bahrain. In Bahrain, you will see the US Navy’s Fifth Fleet. And somewhere or the other, a big war can be seen here.

IRGC Military Options

The US warships and Iran’s IRGC have different things. For example, a big war can be seen between the IRGC, fast-track craft, sea mines, drones, and submarines. Apart from this, Iran can target the Gulf nations and their tankers, which are related to the US and Israel. So Iran has many options at this time, and that is why America does not want this to happen, because America says that this will be economic suicide.

China’s Involvement and the Diplomatic Chessboard

U.S. Request for Chinese Mediation

You can see this from US Secretary of State Marco Rubio, who is also the National Security Advisor. He said here that we want to encourage China to talk to Iran and not close the state of homos. Meaning this is a crystal clear instruction from America to China that you should call Iran on an immediate basis and tell them not to block the State of Hormos. If they do it, it will be another terrible mistake.

China’s Leverage Over Iran

This means that Iran is more important, and they will work hard. Meaning America is calling it economic suicide, which can greatly affect Iran. Look, Donald Trump had said that if Iran does not retaliate, the matter will be resolved here. But the government in Iran will try to show this to the domestic audience as well.

Why the U.S. Asked China

Well, now the question here is, why did the US ask China to intervene?

So the basic thing is that China has leverage at this time. Leverage means that even today, China buys the most oil from Iran. You can see that China is currently buying 1 million barrels of oil from Iran per day. And China has invested around 400 billion in Iran. In the last 25 years, you will find more strategic pacts between the two countries.

U.S. Strategy of Avoiding Direct War

Then the second reason is that America does not want to jump into the war completely. I mean, look what Donald Trump has been saying; he has been saying repeatedly that we do not want war because if there is a war, American citizens will suffer. America’s soldiers will have to come. Now, Trump’s policy, why we don’t want to fight. But Trump himself declared this entire war.

China’s Strategic Dilemma

Economic Interests in the Gulf

Well, apart from this, China’s global economic interest means Beijing needs Gulf oil at this time. So somewhere, because of the Belt and Road Initiative, it has done many things, so it can exploit its interest and put pressure on Iran to de-escalate. Privately, China can say to de-escalate. Yes, publicly, it will try to show that no, yes, we are with Iran, we sympathise.

Geopolitical Balancing Act

But anyway, if we talk about China’s dilemma here, then basically, there are many critical geopolitical tests for China at this time. The first is the Chinese Import of 40% of his oil from the bay. So, here it can put pressure on Iran to intervene, meaning Iran should not blockade here. But the second thing is that China will also want to remain neutral. So in a way, it is a strategic tie with Iran. You can see anti-US sentiment in China. So, because of this, there are both conditions.

Future Scenarios: What Could Happen Next?

Scenario 1: De-escalation through Chinese Diplomacy

Then here it is to avoid a global recession. Meaning if China puts pressure on Iran and China tells Iran not to block it, then it is obvious that it will be beneficial. Because once the blockade happens, inflation will increase. But on the other hand, China will also want to oppose the US hedge fund. And this is a part of the Dilemma here.

Scenario 2: Military Confrontation

Well, the question here is, what can happen next? Look, there are two scenarios. The first best case can be that China gives Iran a handout. Tell Iran that you will have to do this de-escalation from here. Yes, in a way, an attempt will be made to show that, yes, look, there has been a diplomatic pause here. Oil prices should not increase that much.

Risk of Regional War and Escalation

So the attempt is ultimately that oil prices should not increase. Now it can be done in any way because China also knows that if oil prices increase, China will also suffer a big loss, and in a way, a recession can come to China as well. But suppose Iran does not come under pressure from China, China does not say anything, and remains neutral, then military clashes can also be seen here.

Implications for India

Energy Security Challenges

The US and its allies can take out ships from the Strait of Hormuz while guarding them so that Iran cannot attack them, and the IRGC can use missiles, sea mines, drones, and many other things on the ships. It is possible that Israeli strikes also start here, then you can see many scenarios, but if we talk from our perspective, what is important from India’s perspective is that, look, definitely there will be a big impact for us.

Diversified Oil Strategy and Strategic Reserves

Earlier, if you see, almost 50% of our oil used to come from the Strait of Hormuz. It used to come through that route. But today, it has reduced a lot. But we are still importing a significant amount from there. So, first of all, our problem is that the oil, etc., that we are importing can get disrupted. Overall, oil prices can increase. Which, again, is not good for developing countries like India.

Second, India tried to express its oil trading. Ah, we are already buying a lot from Russia. Then, apart from this, we can import from the US and other places as well. If you see the US import from the State of Holmo, it has gone up to 440000 barrels per day, and there is also a buffer. You know that under the strategic reserve, India keeps a hold of crude oil for 9 to 10 days so that we do not face any problem in an emergency situation.

Government Assurances

But again, you can see that Petroleum Minister Hardeep Singh Puri also assured the country that you should not worry, we are very much aware of oil. He said that we have been closely monitoring the entire geopolitical situation, and in the last few years, we have diversified our oil trade and oil supply so that we do not remain dependent on a single country, and the oil marketing companies are also keeping a supply of a few weeks with them. So let’s see what ultimately happens regarding this.