Due to the closure of major supply routes of crude oil like the Strait of Hormuz, India is not likely to face any major disruption in the supply of crude oil in the near future. Giving this information, officials said that the crude oil reserves are enough to meet the needs of at least 10 days. The rapidly changing developments following the military attacks by America and Israel on Iran also include reports of the killing of the supreme leader of the Islamic Republic. This indicates that this conflict will not last very long.
However, top officials and analysts say that if tensions escalate, India has contingency plans ready. Iran’s state media said on February 28 that it had closed the Strait of Hormuz in response to missile attacks by the US and Israel. It is one of the world’s most important energy exit points, through which about a fifth of the global oil and gas supply passes.
Russian plan ready
Officials said that its closure for a short period will not have much impact on India as it has enough supply to meet its fuel needs. He further said that if the Strait of Hormuz remains closed for a long time, the country can change its import sources by increasing purchases of Russian oil. However, its immediate impact will be visible on oil prices. Brent crude closed this week at a seven-month high of around $73 per barrel. If supply is disrupted, prices may rise towards $80 per barrel.
An official said that Indian refinery companies have 10 to 15 days of crude oil reserves combined in tanks and in transit. Moreover, their fuel tanks are full, which can easily meet the country’s fuel requirement of 7-10 days. Another official said that India can also buy oil from distant countries like Venezuela, Brazil and Africa.
Why is Homurz Strait important for India?
India imports 88 percent of its crude oil – the raw material for making fuels like petrol and diesel – and about half of its natural gas needs – which is used to generate electricity, make fertiliser, fuel for home kitchens and CNG for vehicles – and feedstock for cooking gas LPG. Kpler vessel tracking data shows that every day 2.5-2.7 million barrels, or about 50% of India’s crude oil imports, pass through the Strait of Hormuz, mostly from Iraq, Saudi Arabia, UAE and Kuwait.
Additionally, about 60 percent of India’s liquefied natural gas (LNG) imports transit through the Strait of Hormuz, primarily from Gulf suppliers such as Qatar and the UAE, making India’s gas supply vulnerable to disruptions along the way. More importantly, India imports almost all its LPG from the Strait of Hormuz. Any interruption or stoppage at this chokepoint will immediately put pressure on the flow of LPG.
Consider these options also
The Islamic Revolutionary Guards Corps (IRGC), which controls the sea route, has sent repeated messages warning that no ships are allowed to pass through the strait, but has not yet attacked anyone. Another official said that there is ample supply of crude oil in the world and India can contact sellers from Africa, Venezuela and Brazil. He said that India had reduced purchases from Russia in response to US pressure.
If anything goes wrong in the Middle East, we can go back to shopping from Moscow. The question is only about transit time. A ship from the Middle East takes 5 days to reach India, while those coming from Russia take at least a month. So, it is a question of placing orders on time. He said there is also an option to use strategic reserve, which has inventory to meet one week’s needs.
Can prices increase?
If this closure continues for a long time, the situation of LNG supply may worsen. Although the supply is assured soon, India will not be left with many options due to the closure of the Strait of Hormuz for a long time. Another official said this is because unlike crude oil, most LNG volumes are locked in long-term contracts, and only limited volumes are available in the spot or current market. He further said that if India, or China – the second largest importer of fuel from the Middle East – uses other options, then the prices of LNG could increase. Same is the situation with LPG. A separate official said that the government is closely monitoring the changing situation and is working on other options.
What are the experts saying?
Sumit Ritolia, lead research analyst of refining and modeling at commodity market analytical firm Kpler, said that India’s recent return to Middle Eastern crude has increased the risks related to Hormuz. The increase will first be reflected in higher prices, freight and insurance costs, and ultimately in the form of a direct supply shock (as of now, the probability of reduction in supply/production is low). He further said that although temporary disruptions cannot be ruled out, the possibility of a complete blockade for a long period of time is less.
He said diversified sourcing, Russian optionality and layered inventory buffers – including strategic petroleum reserves and commercial stocks – reduce the risk of sustained physical shortages. Amidst increasing geopolitical tension, crude has increased by more than $ 12 per barrel so far this year. On February 27, Brent futures settled at $72.87 per barrel, reaching an intraday high of $73.54 – the highest level since July 30, 2025.