India on Alert as Iran–US Tensions Raise Fears Over Oil and LNG Supplies

Rising tensions between Iran and the United States have triggered fresh concerns in New Delhi, as Tehran has signalled the possibility of temporarily restricting movement through parts of the strategically crucial Strait of Hormuz.

The narrow maritime passage, which connects the Persian Gulf to the open ocean, accounts for nearly 20 percent of global crude oil trade. Any disruption could send global energy markets into turmoil — with India among the most exposed major economies.

Why the Strait of Hormuz Matters to India

India imports nearly 90 percent of its crude oil requirement — roughly 5.5 million barrels per day. More than 40 percent of these supplies originate in West Asia and pass through the Strait of Hormuz.

A potential closure or military escalation could affect shipments from key suppliers including Saudi Arabia, Iraq, United Arab Emirates, Kuwait, Qatar, and Oman — impacting both crude oil and LNG (liquefied natural gas) supplies.

While India has diversified its crude imports in recent years — including substantial purchases from Russia — West Asia remains central to its energy security architecture.

Alternative Routes and Strategic Pipelines

Officials indicate that if shipping through the Strait is disrupted, India could rely partially on alternative export routes such as:

• The Habshan–Fujairah strategic oil pipeline (operated by ADNOC), with a capacity of 1.5 million barrels per day.
• The East–West crude oil pipeline (operated by Aramco), with a capacity of 5 million barrels per day, linking oil fields to the Red Sea.

These pipelines allow certain Gulf producers to bypass the Strait of Hormuz, offering limited relief in a crisis scenario.

Strategic Reserves Offer Cushion

India’s strategic petroleum reserves are estimated to cover approximately 74 days of consumption, providing a buffer against short-term disruptions. Over the past three years, New Delhi has also actively diversified its import basket to reduce overdependence on any single supplier.

However, experts caution that the primary concern is not physical availability but price volatility.

“Our main concern is not supply availability but the surge in global prices,” said energy expert Narendra Taneja.

According to Prashant Vashisth, Senior Vice President and Co-Group Head at rating agency ICRA, a $10 per barrel increase in crude oil prices could raise India’s annual import bill by $13–14 billion — adding pressure to inflation, fiscal balances, and currency stability.

Will the Strait Actually Close?

Despite heightened rhetoric, analysts believe a full closure of the Strait of Hormuz remains unlikely. Such a move would hurt not only oil-importing nations but also Gulf exporters and global markets — including the United States.

Still, even the perception of risk is enough to drive speculative spikes in oil and LNG prices.

For India, the unfolding Iran–US standoff underscores a broader strategic reality: energy security remains deeply intertwined with geopolitical stability in West Asia. As tensions simmer, New Delhi is closely monitoring developments while preparing contingency plans to safeguard its economic interests.