Oil, power, and politics of disruption, Pg14

Key Highlights:

• On February 28, 2026, the Strait of Hormuz was blocked by Iran following military action by the U.S. and Israel, disrupting global oil supply.
• The Strait of Hormuz is a critical route for nearly a fifth of the world's traded oil, connecting the Persian Gulf and the Arabian Sea.
• Global oil prices have surged past $110 a barrel due to the closure, prompting the U.S. to seek increased purchases of sanctioned Russian oil.
• India, the world's second-largest crude oil importer, has increased its reliance on discounted Russian oil, impacting global energy dynamics.

Detailed Insights:

• The concentration of oil reserves in regions like West Asia has historically fueled geopolitical contests among global powers, particularly involving the U.S.
• The U.S. has strategically intervened in West Asia to secure its energy interests, including the Gulf War (1990-91), the Iraq War (2003-11), and recent actions in Venezuela (2026).
• Russia has become a crucial player in stabilizing energy prices due to disruptions in West Asia, despite facing trade sanctions following the Russia-Ukraine war in 2022.
• India's increased imports of discounted Russian oil, rising from 2.5% in 2021 to 39.0% in 2023, have provided stability to global oil prices, indirectly benefiting Western nations.
• Disruptions in oil supply significantly impact India, the world’s second-largest importer of crude oil, leading to higher prices for essential goods and services.

Key Concepts Involved:

• Strait of Hormuz: A narrow waterway connecting the Persian Gulf to the Arabian Sea, vital for global oil transportation.
• OPEC (Organization of the Petroleum Exporting Countries): An intergovernmental organization of 13 countries, aimed to manage the supply of oil to the world market.
• Geopolitics of Energy: The influence of geographical factors on international relations related to energy resources and supply.