The recent suspension of tanker traffic through the Strait of Hormuz has heightened concerns regarding India’s energy supplies, particularly crude oil, LNG, and LPG, as the country heavily relies on West Asian imports. Approximately 88–90% of India’s crude requirements are met through imports, with 35–52% typically transiting this critical chokepoint. The Strait also plays a crucial role in supplying nearly half of India’s LNG and substantial LPG shipments.
Currently, India maintains around 40–45 days of crude cover in case of disruptions, with refiners holding more than 10 days of crude and roughly a week’s worth of fuel stocks. To mitigate potential supply issues, Indian refiners are increasing their imports from alternative routes, including Russia, the US, West Africa, and Latin America. Government insiders suggest that India plans to boost Russian purchases and engage other suppliers to stabilize pump prices.
Should disruptions persist, New Delhi can strategically draw from its reserves to ensure steady domestic supply. However, an extended shutdown could force authorities to limit gas supplies to non-essential industries, potentially driving up inflation, exerting pressure on the rupee, and slowing economic growth.
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