Iran's response to US-Israeli attack
Iran's potential closure or disruption of the Strait of Hormuz has direct implications for global oil prices and India's energy security, given India's heavy dependence on Gulf oil imports. The regionalization of the conflict affects India's diaspora in West Asia and its diplomatic balancing act. This also connects to GS III topics of energy security and India's strategic interests in the Persian Gulf.
Key facts
- Strait of Hormuz is a narrow waterway between Iran and Oman — approximately 21 miles wide at its narrowest point.
- Nearly 20-21% of global oil trade (about 17-18 million barrels per day) passes through the Strait of Hormuz.
- Iran's strategy rested on three pillars: state preservation, war regionalization, and raising global economic costs.
- India imports over 85% of its crude oil needs; Gulf region accounts for a significant share of these imports.
- Any closure of the Strait of Hormuz could spike Brent crude prices sharply, impacting India's current account deficit.
- About 9 million Indian diaspora reside in Gulf Cooperation Council (GCC) countries, sending remittances exceeding $40 billion annually.
Iran's response was based on three pillars: preserving the state, retaliating by regionalizing the war, and enhancing the global economic cost by wielding its strategic lever - the Strait of Hormuz.
Concepts to know
A critical chokepoint through which approximately 20% of global oil trade passes. Any Iran-UAE military conflict threatens shipping through this strait, with severe consequences for global energy supply.
A nation's ability to ensure reliable and affordable access to energy resources. India's dependence on West Asian oil makes regional conflicts a direct national security and economic concern.
A strategic concept where a localized conflict is deliberately expanded to involve multiple neighboring states or actors, raising the cost for the aggressor and drawing in regional proxies.
CAD occurs when a country's imports of goods, services, and transfers exceed its exports. Gold is India's second-largest import item, so mobilising domestic idle gold reduces the need for imports and thus helps narrow the CAD.
The GCC is a political and economic union of six Arab Gulf states — Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman. It is critical to India due to energy trade, remittances from the Indian diaspora, and bilateral investments.
India's strategic engagement with West Asia/Gulf region encompassing energy diplomacy, diaspora welfare, counter-terrorism cooperation, and trade. Any escalation in the region tests India's diplomatic balancing between Iran, Israel, and Arab states.
Linked previous-year questions
The UPSC questions this story connects to.
Consider the following statements: Statement-I: Israel has established diplomatic relations with some Arab States. Statement-II: The 'Arab Peace Initiative' mediated by Saudi Arabia was signed by Israel and Arab League. Which one of the following is correct in respect of the above statements? (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I (c) Statement-I is correct but Statement-II is incorrect (d) Statement-I is incorrect but Statement-II is correct
- a.Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
- b.Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
- c.Statement-I is correct but Statement-II is incorrect ✓
- d.Statement-I is incorrect but Statement-II is correct
International Relations · UPSC 2023
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