New Delhi, June 18: Indian refiners are exploring alternative crude and gas sources, including West African nations, amid rising concerns that escalating Iran-Israel tensions could disrupt global energy flows through the Strait of Hormuz, officials and industry executives said.
The oil ministry has held discussions with refiners and gas companies since hostilities intensified last Friday, evaluating potential supply disruptions and pricing volatility should the critical chokepoint in the Gulf be blocked.
About 40% of India’s crude oil imports and 54% of its liquefied natural gas (LNG) shipments pass through the Strait of Hormuz, the narrow maritime passage between Iran and Oman that accounts for nearly 30% of global oil trade and 20% of LNG movement.
While Indian executives believe a full blockade is unlikely due to the strategic and economic costs to Iran and the broader region, contingency planning is underway. “Closure of the strait would shrink the global pool of available oil and gas. Every economy would feel the impact,” said a senior executive at a state-run refiner.
India, which imports around 90% of its crude oil needs, draws approximately 40% from the Gulf, 35% from Russia, and the rest from Africa, the United States, and other suppliers. Africa’s share in Indian imports dropped from 12% in April to 5% in May, but refiners say it may rise again if disruptions occur in the Gulf.
“If India turns to West Africa for additional supplies, other importers are likely to follow,” another executive said, warning of rising competition and freight costs in global spot markets.
India sources more than half of its LNG from the Gulf, primarily from Qatar (80%) and the UAE. Any disruption to Qatari exports could drive up both spot and long-term LNG prices, with about 60% of India’s long-term LNG contracts linked to crude oil rates.
Unlike crude oil, India lacks strategic gas storage, though it maintains emergency crude reserves covering 9.5 days of national demand. According to the oil ministry, India has total storage capacity equivalent to 74 days of consumption, including inventories at refineries, product depots, pipelines, and ships en route.
India does not publicly disclose actual inventory levels. While refiners have not resorted to “panic buying,” officials say the situation remains fluid. “We’re not seeing immediate disruption, but we’re preparing for multiple scenarios,” one executive added.
Analysts warn that any sustained disruption in the Strait of Hormuz could lead to a sharp rise in global energy prices and potentially involve direct intervention by major powers such as the United States.
India was previously affected by global supply strains in 2022 when a former Gazprom subsidiary defaulted on an LNG contract, forcing the state-owned GAIL to ration supplies. The oil ministry continues to monitor developments in the Middle East and assess energy security options as geopolitical risks evolve.
