Strait of Hormuz disruption sets off India’s emergency oil strategy talks

India is rapidly sharpening its energy contingency strategy as global oil and gas markets reel from escalating tensions in West Asia that have severely disrupted tanker traffic through the Strait of Hormuz a strategic chokepoint through which roughly half of India’s crude and liquefied petroleum imports transit. Authorities are now weighing a multi-pronged plan that includes export curbs on refined fuels, boosting Russian crude imports and even targeted LPG rationing to pre-empt potential domestic shortages, according to government and industry sources familiar with the discussions.
Emergency Options on the Table
Officials from the Ministry of Petroleum and Natural Gas and oil industry executives say the government is exploring both supply- and demand-side levers to safeguard fuel availability over the coming weeks, particularly if tanker movement through Hormuz remains constrained. These measures under consideration include:
•Restricting exports of petrol, diesel and aviation turbine fuel (ATF) to prioritise domestic needs. India currently exports about one-third of petrol and a quarter of its diesel production, with nearly half of its ATF output sent abroad.
•Increasing imports of discounted Russian crude oil which market watchers say could be redirected more quickly to Indian refiners  to offset shortfalls from Gulf producers should the crisis deepen.
•Targeted demand-management measures, including the possibility of rationing liquefied petroleum gas (LPG) supplies to households that have access to alternative cooking fuels, especially in rural districts.
LPG: The Most Immediate Vulnerability
Industry estimates suggest that India’s LPG stocks which rely heavily on Gulf imports are particularly susceptible to disruptions if new shipments cannot arrive via Hormuz. Around 85–90% of India’s LPG imports originate from the Gulf, and current onshore inventories plus cargoes already in transit may be capable of covering less than two weeks of demand if the situation deteriorates further. In anticipation, state-run refiners such as Indian Oil, Hindustan Petroleum and Bharat Petroleum have begun boosting LPG output where possible.
Supply Buffers and Strategic Reserves
While contingency plans are being drafted, government officials have stressed that India is not on the brink of an immediate fuel shortage. Official data and analysts point to commercial crude and product stocks including underground strategic reserves  capable of covering six to eight weeks of domestic consumption under current demand patterns.
Nevertheless, analysts warn that a prolonged disruption could quickly erode these buffers, pushing India to accelerate imports from alternative sources such as the United States, West Africa and Latin America. Riyadh, Abu Dhabi and Kuwait remain key producers, but shipments from these suppliers also depend on Strait of Hormuz access.
Energy Markets React
Global energy benchmarks have already felt the ripples of the crisis. Brent crude prices climbed toward USD 80 per barrel, roughly 10% higher as the conflict intensified, while European natural gas prices spiked amid fears of broader infrastructure impacts in Saudi Arabia and Qatar.Simultaneously, Iran’s Revolutionary Guard has declared the Strait of Hormuz closed to commercial traffic, warning that vessels attempting passage could be targeted a development that has heightened supply fears and underscored the urgency of India’s contingency talks.
Strategic Shifts and Long-Term Considerations
Market observers note that Russia, which already supplies substantial volumes of crude to India, has signalled a “renewed interest” in deepening energy ties should disruptions continue, a stance that could reshape India’s procurement strategy.Separately, concerns persist that broader economic fallout from escalating geopolitical strife — including investment hesitation and global supply chain anxiety  could compound the challenges facing India’s energy security and macroeconomic stability.
India’s multi-layered oil contingency roadmap  from export curbs to sourcing pivots and demand management  reflects a high-stakes balancing act between safeguarding domestic fuel supplies and navigating a volatile global energy landscape. With stocks providing a temporary cushion, the government’s emphasis now is on agility: preparing for disruptions that might span weeks into months as diplomatic and military tensions in West Asia evolve.

(Business Correspondent)