New Delhi, March 1 With sufficient crude oil reserves to meet at least 10 days of needs and fuel stocks covering another 5-7 days, India is unlikely to face any immediate disruptions in oil supplies due to the closure of the Strait of Hormuz, officials said.
Even as developments related to the US and Israeli military strikes on Iran, including reports of the death of Iran's Supreme Leader, suggest the conflict may not last long, New Delhi has contingency plans in place should tensions escalate, top officials and analysts said.
Iran's state media announced on February 28 that the Islamic Republic had closed the Strait of Hormuz, a critical energy chokepoint through which approximately a fifth of global oil and gas supplies transit, in response to US and Israeli missile strikes.
The temporary closure is unlikely to significantly impact India, as it already has sufficient supplies to meet fuel requirements. Officials added that if the closure lasts longer, the country can adjust its imports, leveraging its diversified supply sources, including increased purchases of Russian oil.
The immediate impact is expected to be seen in oil prices. Brent crude closed the week near seven-month highs at around USD 73 per barrel, after rising by approximately 16% since the beginning of the year. Traders are anticipating increased volatility next week, with some models predicting prices to rise to USD 80 a barrel if supply flows are disrupted.
India imports 88% of its crude oil – the raw material for making fuels like petrol and diesel – and about half of its natural gas requirements – the feedstock for electricity generation, fertilizer production, fuel for household kitchens, and CNG for automobiles – and cooking gas LPG.
Data from Kpler vessel tracking shows that 2.5-2.7 million barrels per day, roughly 50% of India's crude oil imports, transit through the Strait of Hormuz, primarily sourced from Iraq, Saudi Arabia, the UAE, and Kuwait.
Furthermore, as much as 60% of India's liquefied natural gas (LNG) imports also transit through the Strait of Hormuz, primarily from Gulf suppliers such as Qatar and the UAE, making India's gas supplies vulnerable to disruptions in the route.
More importantly, India imports almost all of its LPG through the Strait of Hormuz. Any disruption or restriction at this chokepoint would immediately affect LPG flows.
"Indian refineries maintain inventories between 10 and 15 days of crude oil, both in tanks and in transit. Furthermore, their fuel tanks are full, which can easily meet the country's fuel requirements for 7-10 days," an official stated.
"For now, we believe the closure of the Strait of Hormuz will be temporary."
The Islamic Revolutionary Guards Corps (IRGC), which controls the sea lane, has repeatedly warned that no ships are allowed to pass through the Strait, but has not yet attacked any of them.
Another official stated that the world has sufficient crude oil supplies, and India can source from countries like Venezuela and Brazil, as well as Africa.
"India had reduced purchases from Russia in response to US pressure, but we can resume buying from Moscow if there is a disruption in the Middle East," he said.
"The key question is the transit time. It takes 5 days for a ship from the Middle East to reach India, while it takes at least a month for those coming from Russia. So, it's a matter of placing orders well in advance."
The option of tapping into strategic reserves, which hold inventories to meet a week's requirement, is also available, he added.
The situation with LNG supplies may become precarious if the closure lasts for an extended period. While near-term supplies are secured, a prolonged closure of the Strait of Hormuz may leave India with limited alternatives. 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, another official said.
LNG prices may rise if India or China – the other major importers of fuel from the Middle East – tap into alternative supplies, he added.
The same applies to LPG.
The government is closely monitoring the evolving situation and working on alternative solutions, a separate official said.
"India's recent shift back towards Middle Eastern crude has increased its near-term exposure to risks related to the Strait of Hormuz. Escalation would most immediately manifest through higher prices, freight, and insurance costs, as well as a potential supply shock (although the probability of supply/production reduction is currently low)," said Sumit Ritolia, Lead Research Analyst, Refining and Modelling at commodity market analytic firm Kpler.
He went on to state that while temporary disruptions cannot be ruled out, a prolonged full blockade remains a low probability.
"Diversified sourcing, Russian options, and layered inventory buffers – including strategic petroleum reserves and commercial stocks – significantly reduce the risk of sustained physical shortages. Therefore, the principal near-term vulnerability is price volatility and macroeconomic impact, not structural supply insecurity," he said.
Crude prices have climbed more than USD 12 per barrel year-to-date amid rising geopolitical tensions. Brent futures closed at USD 72.87 per barrel on February 27, after reaching a high of USD 73.54 – the highest level since July 30, 2025.