Iran has largely closed the waterway amid the widening Middle East conflict, choking off tanker traffic and sending global energy prices sharply higher.
Oil prices climbed above $100 a barrel last week for the first time since 2022, with analysts warning they could hit $150 or more if shipping remains blocked. For India, which imports around 85 per cent of its oil and gas, reopening the strait is critical for the economy.
External Affairs Minister Dr S Jaishankar suggested that quiet diplomacy is perhaps more effective than military pressure in the contemporary settings.
“Certainly, from India’s perspective, it is better that we reason and we co-ordinate and we get a solution than we don’t,” he told the Financial Times. “So if that sort of allows other people to engage, I think the world is better off for it.”
The two Indian-flagged gas carriers that transited the strait on Saturday did so after discussions between New Delhi and Tehran, a development that India says shows negotiation can work. Dr Jaishankar said India has struck no sweeping deal allowing Indian ships free passage.
“There is no blanket arrangement,” he said. “Every ship movement is an individual happening. It is better that we coordinate and get a solution," he said.
Iranian Foreign Minister Abbas Araghchi said Iran was ‘open’ to countries that want to discuss ‘safe passage of their vessels’.
A few ships have managed to pass through the strait in recent days, often after diplomatic engagement with Tehran. Reports say vessels linked to China have been allowed to pass. Turkey has said one of its vessels crossed the strait following discussions with Iranian authorities.
European governments including France and Italy are also exploring diplomatic options. Dr Jaishankar told the Financial Times that India's discussions with Tehran were continuing. "This is ongoing. If it is yielding results for me, I would naturally continue to look at it," he said.
India is also seeking safe passage for 22 of its vessels that remain stranded west of the strait.
India has been grappling with shortages of cooking gas supplies since the targeting of several cargo vessels effectively shut off the narrow strait.
Most of India’s crude oil and liquified natural gas imports come through this waterway, which lies between Iran and Oman.
India is certainly navigating a delicate diplomatic position as the crisis unfolds.
Delhi maintains close ties with Israel and has growing strategic cooperation with the US, but also has longstanding political and economic links with Iran.
What observers and not from the Modi Bhakt army say?
"...The Indian government has walked a very tricky road with surprising agility. We should not be taking sides because the only side that matters is India’s side and it is not in our interest to antagonise the United States and Israel because that would then put us in the team of our old foe China. Surely, this could never be in India’s interest," wrote Tavleen Singh in 'Indian Express'.
She further adds: "Some commentators are suggesting that Modi could play a useful role as peacemaker which means his ‘silence’ has helped and not harmed India ..... In this very troubled time if we have anything to be grateful for it is that the Congress Party is not in power."
India has called for dialogue and for the safety of commercial shipping in the region - reflecting both its reliance on Gulf energy supplies and its interest in keeping shipping routes open.
"Certainly, from India's perspective, it is better that we reason and we co-ordinate and we get a solution than we don't," he said. "So, if that sort of allows other people to engage, I think the world is better off for it."
The comments come as US President Donald Trump urged countries including the UK and China to send warships to the Strait of Hormuz to help reopen the route.
The tensions have already pushed energy prices higher. Brent crude - the international benchmark used to price much of the world's oil trade - rose close to $106 a barrel on Monday. Jaishankar told FT that India's engagement with Iran was based on its own bilateral relationship and might not apply to other countries.
"Each relationship frankly, in a way, stands on its own merits," he said.
Of course Indian-flagged vessels, Shivalik and Nanda Devi have got safe passage through the Strait of Hormuz.
there is no “blanket arrangement” with Iran for Indian-flagged ships and that “every ship movement is an individual happening”.
Notably Dr Jaishankar has had four telephone conversations with Iranian Foreign Minister Abbas Araghchi since the war started on February 28. PM Narendra Modi has also spoken to Iranian President.
Iranian Minister Araghchi has said separately that Iran was “open” to countries that want to discuss “safe passage of their vessels”.
However, Araghchi denied that Iran had received anything in exchange, citing a “history of dealing with each other . . . which is the basis on which I engaged”.
“It’s not an exchange issue,” he said.
“India and Iran have a relationship. And this is a conflict that we regard as something very unfortunate. These are still early days. We have many more ships there. So while this is a welcome development, there is continuing conversation because there is continued work on that,” he said.
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With the pain now being felt, though not in equal measure, by the sellers of energy — Iran and the Gulf countries — and the buyers — India is not alone, European consumers will feel the pain as will the American — the calculus of the conflict should change.
A prolonged war will soon become politically unpalatable as the thresholds of pain are breached. In the US, the cost of gasoline has now crossed $3.5 per gallon, up around 60 cents from a month ago. Donald Trump is unlikely to want the midterm elections to be held in the shadow of a stock market in the red.
ends
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