India Keeps Shipping Rates Steady Amid Iran-Israel Tensions, Eyes Contingency Plans

25 6月, 2025 by
Administrator

Shipping rates from India remain stable despite escalating tensions between Iran and Israel, government officials confirmed on Tuesday, June 24. However, the Indian government is closely monitoring the situation, concerned that a possible closure of the Strait of Hormuz could cause a major disruption in freight and energy supply routes.

“If Iran imposes a blockade of the Strait of Hormuz, freight movement through West Asia could collapse, sending shipping rates soaring,” officials warned. The Ministry of Commerce has been tasked with real-time surveillance of developments in the Middle East and is already consulting with air cargo firms, insurance providers, and logistics operators to prepare emergency trade protocols.

According to the Global Trade Research Initiative (GTRI), the closure of the Strait of Hormuz — through which 60–65% of India’s crude oil imports transit — would deal a serious blow to India’s energy security, drive up global oil prices, and fuel inflation at home.

"A wider regional escalation could also jeopardize India’s broader trade with West Asia, which includes $8.6 billion in exports and $33.1 billion in imports from countries like Iraq, Jordan, Lebanon, Syria, and Yemen," GTRI noted.

A separate warning came from a report by the State Bank of India (SBI), the nation’s largest lender. It highlighted that direct US military strikes in the conflict zone have intensified risks to India’s economy, particularly through rising oil prices and global supply chain disruptions.

India is highly vulnerable to such shocks, given it imports around 90% of its crude oil, with about 40% of that volume passing through the Strait of Hormuz — a vital maritime chokepoint that handles nearly 20% of global petroleum liquids consumption.

Though India currently does not import crude oil directly from Iran, the SBI report stressed that any disruption in the strait would affect flows from other key suppliers. As of 2024, 20 million barrels per day move through the strait, with limited options for rerouting this immense volume.

The government is expected to outline formal contingency measures if the geopolitical situation continues to deteriorate.

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