India has been allowed to continue its commercial operations through the Strait of Hormuz even as Iran restricts its access for several other nations, according to statements coming out of Tehran. This is a reflection of the increasingly complex geopolitical situation surrounding the West Asia conflict.
Iran’s Foreign Minister Seyed Abbas Araghchi announced that “friendly nations” like India, China, Russia, Iraq, and Pakistan have all been allowed to continue their operations through this important waterway. However, he also announced that no vessels associated with Iran’s enemies will be allowed to travel through this important waterway, as this region has become a “war zone.”
The Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman, is a very narrow waterway. This waterway is important enough that nearly 20% of global oil and liquefied natural gas (LNG) supplies travel through this waterway. Since the conflict escalated, Iran has restricted access through this waterway. This has created uncertainty across global markets.
Oil prices have increased significantly. Brent crude oil prices have moved past $100 per barrel. Compared to prices of around $78 prior to the conflict. The International Energy Agency has termed this
Although the Strait has not officially been closed, the threat of security risks, specific incidents, and the withdrawal of insurance cover have made the Strait difficult for numerous vessels to traverse.
Short-term relief for India, long-term uncertainty
In the short term, the decision of Iran has given India much-needed relief. West Asia has been one of the key contributors of crude oil and LNG imports for India. The uninterrupted supply of energy through the Strait of Hormuz has, therefore, been critical for the country’s energy needs.
Government sources have pointed out that India has been actively engaging in diplomatic efforts to ensure the smooth supply of energy through the Strait, while also ensuring the de-escalation of the conflict in the region. The good news for India is that some of the vessels headed towards the country have successfully passed through the Strait in the recent past. However, the uncertainty stems from the fact that the access of India through the Strait is no longer solely based on international norms, but also on the geopolitical stance of the country. Although the decision of Iran has categorized India as a “friendly country” for the time being,
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A changing rulebook for global trade routes
Iran’s decision to allow selective passage through its territory is a departure from the traditional understanding of the Strait of Hormuz as an international waterway. Traditionally, freedom of passage through such critical routes has been one of the guiding principles.
Iran’s decision to link access and political alignment is in essence a new rule for global trade routes. This is because Iran has essentially imposed a new level of access control on global trade routes.
The United States has warned Iran against restricting maritime traffic and has asked for the full opening of the Strait of Hormuz. The U.S. has warned Iran that failure to do so could lead to wider consequences.
However, the situation is still fluid with tensions remaining high and no resolution in sight.
For India, the issue is no longer about gaining access through this waterway. The issue is now about how to operate in a world where access to global infrastructure is increasingly influenced by global positioning.
While the immediate focus is on energy flows through this waterway, the larger issue is one of control – who has access and on whose say in times of conflict?
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