In Focus: Navigating the Strait of Hormuz Crisis
“Energy security is not simply about securing supplies, but about securing routes, resilience, and strategic flexibility.” The ongoing escalation between Iran and Israel has once again exposed the fragility of the global energy architecture. For oil-importing economies, geopolitical tensions in West Asia often translate into market volatility, supply anxieties and inflationary pressures. Yet for India, the world’s third-largest oil consumer, the stakes are far more complex. India imports nearly 85–88 per cent of its crude oil requirement, making energy security an integral pillar of economic and foreign policy strategy. The Iran–Israel crisis, therefore, raises a central policy question: how exposed is India to energy disruptions in the Gulf, and how resilient is its energy strategy to geopolitical shocks?
While the crisis underscores India’s structural exposure to West Asian supply routes, it also reveals something equally important: India has gradually built a multi-layered energy security architecture designed precisely for such disruptions.
India’s Energy Exposure: The Hormuz Factor
At the centre of the current crisis lies the Strait of Hormuz, the narrow maritime passage connecting the Persian Gulf with the Arabian Sea. This chokepoint is among the most critical arteries in the global energy system.
Around 20–21 million barrels of oil per day pass through Hormuz, nearly 20 per cent of global petroleum trade.
For India, the dependence is particularly significant: roughly 2.5–2.7 million barrels per day of crude imports transit this corridor, accounting for about half of India’s total oil imports.
Table 1: India’s Energy Exposure to the Strait of Hormuz
Sources: Kpler Analytics and Deccan Chronicle
The concentration of energy flows through a single maritime corridor means that any military escalation in the Gulf, even without a complete blockade, can disrupt shipping routes, increase insurance premiums for tankers, and push crude prices upward. Recent hostilities have already triggered volatility in global energy markets. Oil prices surged sharply during the early days of the conflict as fears of supply disruptions spread across global trading floors. However, contrary to alarmist narratives, the impact on India’s actual supply chain has been relatively limited compared to what was expected earlier.
Why India’s Energy Supply Has Remained Stable
Despite escalating tensions, India’s energy flows have not collapsed. In fact, officials indicate that around 70 per cent of India’s crude imports currently bypass the most vulnerable segments of the Hormuz route, reflecting diversification strategies developed over the past decade. Moreover, India’s energy supply chain benefits from three important buffers:
Diversified suppliers
Strategic petroleum reserves
Operational inventories held by refiners
Together, these layers provide short to medium-term resilience against supply shocks.
The Russia Factor
One of the most important transformations in India’s energy strategy occurred after the Ukraine war began in 2022. When Western sanctions reshaped global oil markets, India rapidly increased purchases of discounted Russian crude. This shift created an important strategic fallback option.
Recent data indicate that during the current Gulf tensions, India significantly increased its Russian oil imports to compensate for potential disruptions in Middle Eastern shipments. This flexibility demonstrates how India’s energy strategy has evolved from geographical dependence to supply diversification.
Major Sources of India’s Crude Imports: Russia vs Gulf vs others
Source: Telegraph India
Lessons from History: Three Oil Shocks
Energy crises have repeatedly reshaped global geopolitics. The current conflict echoes earlier shocks that transformed energy policy worldwide.
The 1973 Arab Oil Embargo
When Arab oil producers imposed an embargo on countries supporting Israel during the Yom Kippur War, oil prices quadrupled. Import-dependent economies faced severe inflation and recession. The crisis forced many countries to rethink energy security, leading to the creation of strategic petroleum reserves and the International Energy Agency (IEA).
The 2019 Gulf Tanker Attacks
In 2019, multiple oil tankers were attacked near the Strait of Hormuz during US–Iran tensions. Insurance costs for tankers surged dramatically, demonstrating how even limited disruptions can destabilise energy supply chains. India, Japan and South Korea were among the most vulnerable importers.
The 2022 Ukraine War
Russia’s invasion of Ukraine reshaped global oil trade. India adapted quickly, increasing purchases of discounted Russian crude and diversifying its import basket. However, the shift created a paradox: while supplier diversification increased, the logistics of energy supply still relied heavily on vulnerable maritime corridors.
The Route Problem: Maritime Chokepoints
While diversification has strengthened supply resilience, logistics remain a critical challenge. Energy security is shaped not only by who supplies oil, but also by how that oil travels across oceans. The Strait of Hormuz remains one of several critical chokepoints in global energy trade. Others include the Bab-el-Mandeb Strait (Red Sea), Suez Canal, and Malacca Strait.
For India, disruptions in these corridors can raise freight costs and delay shipments. In extreme scenarios where the Hormuz passage becomes inaccessible, oil shipments from the Gulf could theoretically take an alternative route via the Cape of Good Hope around Africa. However, this detour adds significant shipping time and cost. This logistical reality explains why maritime security has become a central component of India’s energy strategy.
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A Few Good Reads
Christina Lu highlights how the Iran war has prevented fertiliser from transiting the Strait of Hormuz, arguing that such disruptions are expected to harm U.S. farmers, a key Trump voter base, ahead of crucial midterm elections.
Deepanshu Mohan and Saksham Raj argue that the recent Hormuz-linked disruption exposes LPG’s import and logistics vulnerabilities, while piped natural gas (PNG) proved more resilient, underscoring the case for expanding pipeline infrastructure alongside LPG.
Amit Kapoor, Ananya Khurana and Pradeep Puri write that the Food Corporation of India should pivot from open-ended physical MSP procurement to a more calibrated role focused on maintaining buffer stocks for food security while reducing unnecessary costs.
Parul Agarwala and Priyanka Kochhar argue that AI can help address urban inequality if treated as public infrastructure through open urban data, equity-first design, and AI-enabled planning that prioritises vulnerable communities.
Sumita Dawra notes that as India moves to implement its new labour Codes, the real challenge is no longer legislative change but interpreting how the new Codes will function in practice.
Excellent breakdown of India's Hormuz exposure. One dimension worth adding: the 1973 embargo, the 2019 tanker attacks, and the current crisis aren't isolated events — they're chapters in a single story about how control over this waterway was engineered over 125 years.
The D'Arcy Concession in 1901 didn't just secure oil rights — it established the template for converting a geographic chokepoint into a permanent instrument of leverage. Every subsequent crisis has reinforced the same structural dynamic: whoever controls transit through Hormuz controls the cost basis of import-dependent economies.
Your point about Iran selectively allowing certain shipments through is particularly important. That's not new — it echoes the selective enforcement patterns that have defined Hormuz since the Tanker War of the 1980s. The question isn't whether India can diversify suppliers. It's whether the structural repricing of transit risk permanently changes India's energy cost basis — and what that means for fertilizer subsidies, refinery margins, and food prices.
I traced this full arc in a recent piece: https://nazem.substack.com/p/the-coup-that-never-ended