India will not face an immediate disruption in crude oil or LPG supplies despite the closure of the Strait of Hormuz, one of the world’s key energy chokepoints, following US and Israeli strikes on Iran, including the reported death of its Supreme Leader.
Crude inventories currently cover at least 10 days of requirements, with fuel stocks meeting an additional 5–7 days. Kpler vessel tracking shows 2.5–2.7 million barrels per day, roughly half of India’s crude imports, transit the Strait from Iraq, Saudi Arabia, the UAE and Kuwait. About 60 per cent of India’s LNG imports also move through this route, mainly from Qatar and the UAE.
“The closure for a short duration will not have much impact on India as it already has supplies to meet fuel requirements,” an official noted.
In the event of a prolonged disruption, India can recalibrate imports from diversified sources, including Russia. “India had cut purchases from Russia in response to US pressure, but we can go back to buying from Moscow in case there is disruption in the Middle East. The only question is transit time. It takes 5 days from the Middle East, while it takes at least a month from Russia,” the official added. Strategic petroleum reserves could also provide an additional week’s supply.
Oil prices reflected initial market concerns. Brent crude closed the week near seven-month highs at about USD 73 per barrel, up roughly 16 per cent since the start of 2026. Analysts warn that prices could touch USD 80 per barrel if supply flows face credible threats.
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India imports 88 per cent of its crude oil, half of its natural gas, and almost all of its LPG through the Strait of Hormuz. While near-term supplies are secure, a prolonged closure could strain LNG and LPG availability. “Unlike crude oil, most LNG volumes are locked in long-term contracts, and only limited volumes are available in the spot market,” an official said.
Sumit Ritolia, Lead Research Analyst at Kpler, said: “India's recent pivot back toward Middle Eastern crude has increased its near-term exposure to Hormuz-linked risks. Escalation would most immediately manifest through higher prices, freight and insurance costs and also at last outright supply shock (as of now, the probability of supply/production reduction is low).”
“Diversified sourcing, Russian optionality and layered inventory buffers, including strategic petroleum reserves and commercial stocks, materially reduce the risk of sustained physical shortages. The principal near-term vulnerability is therefore price volatility and macro impact, not structural supply insecurity.”
Brent futures have climbed over USD 12 per barrel this year amid rising geopolitical tensions, settling at USD 72.87 on February 27, after touching an intraday high of USD 73.54, the highest since July 30, 2025, he added.
The government continues to monitor the situation and explore alternatives to mitigate potential supply disruptions.
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