India’s Oil Lifeline at Risk: Navigating Around the Strait of Hormuz

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✅ Quick Summary:

Over 60% of India’s oil imports pass through the Strait of Hormuz
Iranian threats to block the strait are real and recurring
India is diversifying suppliers: Russia, U.S., Africa, Latin America
Strategic investments in Chabahar and SPR reserves are critical buffers
Naval deployments and digital surveillance strengthen maritime security
Long-term energy independence lies in renewables and regional cooperation

Energy Security in a Volatile Geopolitical Landscape

The Middle East, long considered the world’s energy powerhouse, is witnessing a resurgence of geopolitical tensions. Among the key flashpoints is the Strait of Hormuz, a narrow yet vital waterway that sees over 20% of global oil pass through each day. With Iran threatening to block the strait amid mounting confrontations with the West, countries heavily dependent on Gulf energy are reviewing their vulnerabilities—India foremost among them.

India, the third-largest energy consumer globally, imports nearly 85% of its crude oil, much of which travels through the Strait of Hormuz. As a response to potential disruptions, India is proactively mapping out alternative shipping routes, diversifying suppliers, and reinforcing strategic reserves, aiming to shield its economy from energy shocks. This essay explores the technical, strategic, and diplomatic dimensions of India’s evolving energy security architecture in the face of this looming threat.

1. The Strait of Hormuz: A Strategic Bottleneck

1.1 Vital Oil Transit Point

The Strait of Hormuz, just 33 km wide at its narrowest point, connects the Persian Gulf to the Gulf of Oman and Arabian Sea. Bordered by Iran to the north and Oman/UAE to the south, it handles:

~17 to 20 million barrels of oil per day
Over one-third of global LNG (liquefied natural gas) shipments
Key exports from Iraq, Saudi Arabia, UAE, Qatar, and Kuwait

Even minor disruption can cause oil prices to spike by $10–20 per barrel, triggering global inflation and market panic.

1.2 Iran’s Threat to Block the Strait

Iran has repeatedly threatened closure of the strait—particularly during:

The U.S. withdrawal from the Iran Nuclear Deal (JCPOA) in 2018
The assassination of General Qassem Soleimani in 2020
Ongoing sanctions and confrontations with U.S. allies

Iran’s Islamic Revolutionary Guard Corps Navy (IRGCN) has the capability to deploy:

Naval mines and anti-ship missiles
Fast-attack craft swarms
Underwater drones and missile batteries based on Qeshm and Abu Musa islands

These actions represent asymmetric warfare threats to commercial and naval traffic in the strait.

2. India’s Energy Dependency: A Strategic Weakness

2.1 Crude Oil Imports and Exposure

India imported 233.4 million metric tonnes (MMT) of crude oil in FY 2023–24, with over 60% routed through Hormuz. Key suppliers via this corridor include:

Iraq
Saudi Arabia
UAE
Kuwait
Qatar (for LNG)

Even a temporary blockade could result in:

Severe fuel shortages
Spiking retail fuel prices
Disruption in transportation, manufacturing, and agriculture
Widened current account deficit due to higher import bills

2.2 LNG and Petrochemicals

India’s dependence on Qatari LNG also passes through Hormuz. This fuel powers:

City gas networks (CGD)
Fertilizer plants
Power generation units

Hence, ensuring continuity in maritime energy corridors is a national imperative.

3. India’s Multi-Pronged Strategy to Reduce Hormuz Risk

3.1 Diversification of Oil Suppliers

India is actively expanding its oil basket to non-Gulf suppliers:

Russia (increased imports despite Western sanctions)
United States
West Africa (Nigeria, Angola)
Brazil and Guyana

Though more expensive and logistically complex, this geographical diversification improves resilience.

3.2 Strategic Petroleum Reserves (SPR)

India currently maintains 5.3 million tonnes of SPR in:

Visakhapatnam (AP)
Mangalore (Karnataka)
Padur (Karnataka)

These reserves provide buffer cover for 9–10 days of import disruptions. Phase II aims to increase this to 12–15 days by adding new capacities in Chandikhol (Odisha) and Bikaner (Rajasthan).

3.3 Alternate Shipping Routes

Though rerouting around Hormuz adds distance and cost, India is exploring:

Red Sea route via Bab el-Mandeb and Suez Canal
East African corridor through Mozambique and Tanzania
Deep-sea docking at Sri Lanka and Mauritius for mid-route refueling

While these do not fully bypass Hormuz, they offer tactical flexibility during conflict scenarios.

4. Diplomatic and Naval Initiatives

4.1 Chabahar Port: A Gateway Beyond Hormuz

India’s investment in Chabahar Port in southeastern Iran serves multiple purposes:

Access to Afghanistan and Central Asia via land
Part of the International North-South Transport Corridor (INSTC)
Potential to store crude oil and LNG in future strategic facilities
Acts as an Indian foothold in Iran, allowing leverage during crises

Recent operational agreements between India Port Global Ltd and Iran bolster this partnership, despite U.S. sanctions.

4.2 Indian Navy’s Strategic Posture

India has deployed naval assets under:

Mission Sagar
Operation Sankalp (2019-present), which provides naval escort to Indian commercial ships in Gulf waters

The Indian Navy also conducts joint exercises like:

Zayed Talwar (UAE)
Varuna (France)
Malabar (QUAD nations)

India is also investing in Maritime Domain Awareness (MDA) using:

Satellite surveillance
Integrated Coastal Surveillance Network (ICSN)
Maritime fusion centers to monitor real-time threats

5. The Economic Angle: Oil Price Volatility and Domestic Inflation

Even if India finds alternative suppliers, freight costs and insurance premiums rise when Hormuz is under threat. This translates to:

Rising petrol/diesel/LPG prices
Impact on inflation and monetary policy
Stress on government subsidies and foreign exchange reserves

India’s RBI and Ministry of Petroleum track these metrics closely to adjust excise duties, import contracts, and refine supply chains accordingly.

6. Future Pathways: Toward Energy Independence

6.1 Renewable Energy Expansion

India is fast-tracking its National Green Hydrogen Mission, solar parks, and battery storage projects. This serves dual purposes:

Reduce long-term hydrocarbon dependency
Minimize impact of foreign oil disruptions

6.2 Regional Energy Grids

India is exploring cross-border electricity trade with:

Bangladesh
Bhutan
Nepal
Sri Lanka

These interconnections diversify energy access beyond fossil fuel constraints.

Conclusion: Resilience in an Uncertain Energy World

The Strait of Hormuz may lie over 1,500 kilometers away, but its fate is intertwined with India’s energy and economic security. The possibility of Iran blocking the passage—whether due to military action, sanctions retaliation, or strategic signaling—poses a credible threat that India cannot afford to ignore.

By diversifying suppliers, building strategic reserves, investing in alternate corridors like Chabahar, and deploying naval assets, India is crafting a robust multi-layered response. These actions not only buffer short-term shocks but also align with India’s long-term vision of energy sovereignty and strategic autonomy in a rapidly changing world order.