Why the US-Iran war will hurt India more than China
· Scroll
On February 28, as the conflict in West Asia escalated with missile strikes, Iran announced the closure of the Strait of Hormuz, a key global shipping trade route. The strait is the only opening from the Persian Gulf to the open sea. This makes it is the easiest channel for the movement of goods from countries situated along the gulf, such as Qatar and the United Arab Emirates, to other parts of the world.
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Key among these commodities are natural gas and crude oil. Between 20% and 25% of global crude oil supply passes through the strait, as does 20% of the global supply of liquified natural gas.
As a consequence of the closure, prices have escalated. Crude oil rose sharply from $65 per barrel on February 26, a day before the outbreak of the conflict, to $75.92 by March 3. The price of liquified natural gas rose from $2.8 to $3.06 per million British thermal units in the same period.
Asia is expected to be severely hurt by the crisis – 75% of the oil and 59% of the liquified natural gas through this chokepoint flows to China, India, Japan and South Korea. Of these countries, China and India are likely to be most affected...