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US, Iran reach deal to end war, reopen Hormuz
The Strait of Hormuz is a critical chokepoint through which a significant share of India's crude oil imports pass; any blockade or reopening has direct macroeconomic consequences for India. This deal also touches on India's West Asia policy, its strategic autonomy in navigating US-Iran tensions, and broader Gulf regional stability. For GS III, the energy security and current account implications are highly exam-relevant.
Key facts
- Deal expected to be signed in Switzerland, making it a multilateral diplomatic milestone.
- Strait of Hormuz connects the Persian Gulf to the Gulf of Oman — roughly 20-30% of global oil trade passes through it.
- India is one of the world's largest crude oil importers, with a significant share sourced from Gulf nations.
- Blockade of Hormuz had disrupted Gulf oil supplies, affecting India's energy costs and current account.
- India welcomed the deal, signalling its stake in West Asian stability and energy supply chains.
- The agreement aims to end the US-Iran conflict and ease regional tensions in the Gulf.
- Lebanon
- Hezbollah
The agreement, which is expected to be signed in Switzerland later this week, aims to reopen the Strait of Hormuz and ease tensions in the region. The deal has been welcomed by India, which has been affected by the war and the subsequent blockade of Gulf oil supplies.
Concepts to know
Critical chokepoint through which ~20% of global oil trade passes; Iran's nuclear status directly affects stability in this region, impacting global energy prices and India's oil imports.
A country's ability to ensure reliable, affordable access to energy resources; for India, it involves diversifying oil and gas sources, maintaining strategic petroleum reserves, and engaging diplomatically with key oil-producing nations.
CAD is the difference between a country's total imports of goods, services, and transfers and its total exports. India's merchandise trade deficit is the primary driver of its CAD, monitored closely by RBI and policymakers.
India's foreign policy principle of maintaining independent positions and avoiding binding military alliances, allowing simultaneous engagement with rival powers like the US, Iran, Israel, and Russia.
India maintains historically balanced relations with both Iran and Gulf Arab states as well as the US. The region is critical for India's energy imports, diaspora remittances, and counter-terrorism cooperation.
Linked previous-year questions
The UPSC questions this story connects to.
Consider the following statements: Statement-I: Israel has established diplomatic relations with some Arab States. Statement-II: The 'Arab Peace Initiative' mediated by Saudi Arabia was signed by Israel and Arab League. Which one of the following is correct in respect of the above statements? (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I (c) Statement-I is correct but Statement-II is incorrect (d) Statement-I is incorrect but Statement-II is correct
- a.Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
- b.Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
- c.Statement-I is correct but Statement-II is incorrect ✓
- d.Statement-I is incorrect but Statement-II is correct
International Relations · UPSC 2023Consider the following pairs: International Agreement/Set-up — Subject 1. Alma-Ata Declaration — Healthcare of the people 2. Hague Convention — Biological and chemical weapons 3. Talanoa Dialogue — Global climate change 4. Under 2 Coalition — Child rights Which of the pairs given above is/are correctly matched? (a) 1 and 2 only (b) 4 only (c) 1 and 3 only (d) 2, 3 and 4 only
- a.1 and 2 only
- b.4 only
- c.1 and 3 only ✓
- d.2, 3 and 4 only
International Relations · UPSC 2020With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? 1. The Agreement was signed by all the member countries of the UN and it will go into effect in 2017. 2. The Agreement aims to limit greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2 degrees C or even 1.5 degrees C above pre-industrial levels. 3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $1000 billion a year from 2020 to help developing countries to cope with climate change. Select the correct answer using the code given below. (a) 1 and 3 only (b) 2 only (c) 2 and 3 only (d) 1, 2 and 3
- a.1 and 3 only
- b.2 only ✓
- c.2 and 3 only
- d.1, 2 and 3
Environment · UPSC 2016
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RBI revises priority-sector lending norms for small finance banks
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