Strait of Hormuz Disruption: Why India Is Covered — For Now | Energy Security Analysis

Economy | Energy Security

Date: 2 March 2026  |  Source: The Indian Express (Sukalp Sharma), 2 March 2026

Tags: Strait of Hormuz, Energy Security, Crude Oil, LPG, India Imports, CUET GK

The Strait of Hormuz handles one-fifth of global petroleum. Understand India’s energy vulnerability, import dependency, and price impact analysis for CUET/AILET preparation.

The ever-widening conflict involving Iran, the United States, and Israel has severely disrupted oil and gas flows through the Strait of Hormuz — described as a critical artery for global energy supply. After Israel and the US launched military strikes in Iran, Tehran retaliated by targeting other Gulf countries that house American military interests. Iran’s Islamic Revolutionary Guards Corps (IRGC) transmitted messages claiming the strait had been closed, though no official declaration followed from Tehran.

For India — the world’s third-largest consumer of crude oil — the disruption raises urgent questions about energy security. The good news, for now, is that India is relatively well-positioned to absorb a short-term supply shock.

The Strait of Hormuz is the world’s most important oil transit chokepoint — a narrow waterway between Iran and Oman that connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Its navigable lanes are just two miles wide in each direction.

Key statistics:

• Handles approximately one-fifth (1/5) of global liquid petroleum consumption and global LNG trade.
• Around 15 million barrels of crude pass through every day.
• Around 2.5–2.7 million barrels per day from Iraq, Saudi Arabia, UAE, and Kuwait transit the strait.

While pipelines exist in Gulf states, their capacity is limited. At full utilisation, they can handle only 9 million barrels per day — leaving a massive surplus dependent on the strait.

India’s import dependency makes it particularly vulnerable:

• India is the world’s 3rd largest consumer of crude oil with an import dependency of over 88%.
• The majority of India’s gas consumption is also met through imports.
• India imports 80–85% of its LPG needs from Gulf suppliers — almost entirely transiting through Hormuz. Unlike crude, India has no strategic LPG reserves.
• Around 60% of India’s LNG imports pass through the strait.

Despite this exposure, India has several buffers:

• Crude Inventories: Indian refiners have crude inventories of over 10 days, along with about a week’s worth of fuel stocks.
• Strategic Petroleum Reserves: India can draw on these to cover any potential shortfall.
• Alternative Sourcing: India can accelerate spot procurement from non-Hormuz regions and has been diversifying to Russia, West Africa, and Latin America.
• Russian Oil: Continued availability of Russian cargoes in the Indian Ocean/Arabian Sea region (India substantially reduced its intake of Russian crude more recently).

Analysts believe a full, prolonged blockade is unlikely. The strait has been threatened by Iran before but has never actually been closed — because Gulf oil producers (including Iran’s allies) also depend on it for their revenues.

Even without a full blockade, the disruption has economic consequences:

• Every $1 per barrel increase in crude oil price could raise India’s annual oil import bill by $1.8–2 billion.
• In a scenario of prolonged disruption, oil prices could top $100 per barrel.
• Benchmark Brent crude prices ended the week well over $72 per barrel — the highest since late July of last year.
• If markets open with escalation signals, the war premium on oil prices could jump significantly.