As the United States-Israeli war on Iran completes two weeks, it has triggered a global energy crisis, even as Iran’s retaliation threatens to pull the rest of the Middle East into the conflict.
The Strait of Hormuz, through which some 20 to 30 percent of global crude and liquefied natural gas (LNG) pass, has effectively been closed because of the conflict, sending crude prices soaring and disrupting oil and gas supplies. More than 80 percent of India’s gas and up to 60 percent of its oil pass through the Strait of Hormuz, which connects the Gulf to the Gulf of Oman and the Arabian Sea and is currently at the centre of retaliatory tactics Iran is deploying against the US and Israel. By threatening all shipping coming through, Iran has effectively closed the strait – leaving Gulf oil producers with no sea route by which to deliver oil and LNG.
Most shipping insurers have cancelled war risk coverage for tankers in the strait. Then on Wednesday, a Thai ship heading to India was attacked, drawing criticism from India.
Hotels and restaurants in India are already weighing closure and people are queueing to stock up on LPG (cooking gas) cylinders amid fears of a shortage, even though the government assures the public it has approximately one month’s supply in storage. Such is the panic, however, that the government has gone as far as to invoke emergency measures to discourage hoarding, urging people to remain calm. Iran has invoked the right to self-defence to justify the retaliatory attacks and has used the strait as leverage in an attempt to end the war. More than 1,300 civilians have been killed and properties have been damaged across Iran amid the US-Israeli attacks.
Iran’s tactics seem to be working, as stocks have plunged and oil prices have spiked, reaching nearly $120 a barrel on Sunday before settling at about $100 this week, which is still about $40 more than before the war began. This week, Iran’s Islamic Revolutionary Guard Corps (IRGC) said it would not allow “one litre of oil” to pass the strait, and warned the world to expect oil to reach $200 per barrel. Thousands of Western expats have already left or been evacuated by their countries, but the sheer scale of Indian population makes it a logistical nightmare. Some 35 million expats live in the Gulf countries, which have emerged as major economic and aviation hub in addition to the oil wealth. Of them, 9.1 million are from India – almost double the 4.9 million Pakistanis who come in second place.
Ahmad, the former Indian ambassador, said that “there is no way, in a war situation, any country, including India, can evacuate nine or 10 million people”.
His message to Indians in the region: “We have been shoulder to shoulder with our Gulf brethren in the good times; we will be shoulder to shoulder with them in the bad times.”
Ahmad, however, pointed out that India had successfully evacuated nationals in past conflicts, including the 1991 Gulf War, when he was India’s consul general in Jeddah. Nearly 200,000 Indian nationals were evacuated from Kuwait when Iraq invaded the Gulf nation in 1990.
Source: Here