Crude may touch $150/barrel if Strait of Hormuz remains closed for 4-8 weeks: Nuvama
GS3Economy · S&T · Environment · Security· External sector, trade & FDI· Prelims·
Why in news
Nuvama issued a report warning that a 4-8 week closure of the Strait of Hormuz could drive crude oil prices to $110-150 per barrel due to supply tightening.
Background
The Strait of Hormuz is a critical maritime chokepoint for oil shipments to Asian economies including China, India, Japan, and South Korea. The report suggests that sustained closure could lead to reduced refinery runs and higher LNG prices, potentially forcing India to reduce imports.
Facts for Prelims
- FactProjected crude oil price range: USD 110-150 per barrel if Strait of Hormuz remains closed for 4-8 weeks
- PlaceStrait of Hormuz: Critical maritime chokepoint for oil shipments to Asia
- FactImpacted Asian economies: China, India, Japan, and South Korea
For Mains
Q. Analyze the vulnerability of India's energy security to maritime chokepoints and discuss strategies to mitigate supply chain disruptions in the Middle East.
Dimensions to cover in your answer
- Supply chain vulnerability: High dependence on Middle Eastern crude and maritime chokepoints for refinery feedstock
- Fiscal pressure: Inflationary impact of spiked crude prices on domestic fuel subsidies and trade deficit
- Strategic diversification: Trade-offs between utilizing strategic reserves and diversifying long-term energy import sources
Keywords: Energy Security · Supply Chain Resilience · Maritime Chokepoints · Trade Deficit · Strategic Reserves
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.