New Delhi— As tensions escalate in the Strait of Hormuz following U.S. airstrikes on Iranian nuclear sites, India’s key crude suppliers—Saudi Arabia and Russia—are stepping in to provide continuity in oil shipments, offering a buffer against potential disruptions, according to a report released Monday by Yes Securities.
India, which maintains strategic crude reserves sufficient for approximately 90 days, relies on the Strait of Hormuz for more than 35 percent of its crude and 42 percent of its liquefied natural gas (LNG) imports. The recent Iranian parliamentary approval for a potential closure of the strait has raised alarms in energy markets, given its role as the world’s most vital oil transit chokepoint.
However, Saudi Arabia’s ability to reroute crude through the Red Sea via the Petroline-Yanbu corridor is offering a crucial contingency. India sources around 18–20 percent of its crude from Saudi Arabia, and this infrastructure ensures a significant portion of those supplies could continue even if the Hormuz route is compromised.
While higher freight costs and logistical hurdles may arise, the report notes that Saudi Arabia’s export flexibility, coupled with India’s diversified sourcing strategy, minimizes the risk of a severe supply shortfall.
India’s energy import profile has undergone a major transformation since 2022. Russian oil imports have surged to 2.2 million barrels per day (mb/d) as of June—surpassing combined supplies from the Middle East. Additional volumes from the U.S. (0.44 mb/d), Brazil, West Africa, and Latin America further reduce India’s reliance on routes that pass through Hormuz. These alternatives access India through safer shipping lanes like the Suez Canal, the Cape of Good Hope, and the Pacific Ocean.
India currently imports about 5.5 mb/d of crude oil, with approximately 2 mb/d—over one-third—passing through the Strait of Hormuz. Despite the exposure, India’s ability to shift volumes quickly gives it a strategic advantage in maintaining supply security.
While fears of a complete Hormuz shutdown persist, the report suggests such a scenario is unlikely. A total blockade would severely impact Iran’s own oil exports, nearly all of which transit via Kharg Island through the strait. It would also strain its relations with major buyers like China and could trigger a strong international military response.
Experts quoted in the report assess the likelihood of a full closure as “very low.” More probable scenarios involve temporary disruptions lasting 24 to 72 hours. Even short-term blockages, however, could create significant volatility, disrupt tanker availability, and lead to higher risk premiums in global oil and petroleum markets. Tanker movement data already shows a drop in empty vessels heading toward the Middle East and Gulf regions, reflecting growing uncertainty. (Source: IANS)
