KATHMANDU: Tensions in the Gulf region have raised fears about a possible shutdown of the Strait of Hormuz by Iran. This comes after recent military actions by the United States, and experts warn that such a move could disrupt global oil supplies.
The Strait of Hormuz is a narrow waterway that connects the Gulf to the Arabian Sea. It is bordered by Iran in the north and Oman and the UAE in the south. Despite being just about 50 km wide at its entrance and as narrow as 33 km at some points, it is one of the busiest shipping lanes in the world. Around 20% of the world’s oil and gas passes through this route.
If the strait is blocked, it could lead to a sharp rise in global oil prices, possibly pushing them above USD 100 per barrel. This would increase the cost of goods and services worldwide, as higher fuel prices affect transportation, production and manufacturing.
Countries like China, India, Japan and South Korea, which buy large amounts of oil through the strait, are expected to be hit hard. India, in particular, gets nearly half of its oil and 60% of its natural gas from this route.
Nepal, which depends entirely on India for its fuel supply, is particularly vulnerable. Any disruption in oil supply or price hikes in India would directly affect Nepal. Higher fuel prices could make transportation and logistics more expensive, leading to costlier goods and services across the country.
