Petrol may reach ₹120 per litre: Reason – Iran may block the world’s biggest oil supply route; crude oil rises to $80 per barrel.

Iran’s parliament has recently passed a proposal to close the Strait of Hormuz in response to U.S. airstrikes. If the Strait is shut down, it could directly impact petrol and diesel prices in India, as it is a crucial route for global oil trade.

Following this news, crude oil prices surged close to $80 per barrel. Since India imports a major portion of its oil requirements, a prolonged rise in crude prices may force oil companies to hike petrol and diesel rates.

Here’s a breakdown of the issue through 6 key Q&As:

Q1: What is the Strait of Hormuz, and why is it so important?
A: The Strait of Hormuz is a narrow sea passage connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. Although only 33 km wide, it is one of the most critical maritime routes in the world.

• About 20–25% of global crude oil and 25% of natural gas pass through this strait.

• Oil tankers from major producers like Saudi Arabia, Iraq, Kuwait, and Qatar use this route to ship oil globally.

• For India, over 40% of its oil imports come through this corridor.

If the strait is blocked, it could disrupt supply chains and lead to a global oil shortage, pushing up prices worldwide—including in India.

Q2: Why has Iran decided to shut down this route?
A: Tensions between Iran and Israel had already been simmering. On June 22, the United States carried out airstrikes on three of Iran’s nuclear sites — Natanz, Fordow, and Isfahan. In retaliation, Iran’s parliament passed a proposal to close the Strait of Hormuz.

However, to implement this decision, Iran still needs approval from Supreme Leader Ayatollah Khamenei and the National Security Council. Iran has warned that if provoked further, it may shut the strait, disrupting global oil supplies.

Q3: Will petrol and diesel prices rise in India?
A: If the Strait is closed, there will be a disruption in oil supply. Experts believe crude oil prices could rise by 30–50%. Currently, Brent crude is around $80 per barrel, but it could surge to $120–$150 per barrel. This could significantly impact India in the following ways:

• Petrol and diesel prices may rise: With expensive crude, fuel prices in India could shoot up. Petrol could reach or even exceed ₹120 per litre.

• Overall inflation could increase: Higher fuel prices will push transportation costs, making food items, medicines, and other essentials more expensive.