West Asia chaos threatens India's oil lifeline

Tensions between Saudi Arabia and Yemen's Houthi rebels, plus the blocked Strait of Hormuz, expose how vulnerable India is when relying on limited energy routes and suppliers.

India imports 89 percent of its crude oil

In 2024-25, India depended on imports for 42 percent of primary energy overall, but 89 percent of crude oil and 49 percent of natural gas came from abroad.

The Strait of Hormuz carries one-fifth of global energy

This critical waterway linking the Persian Gulf to the Gulf of Oman has been effectively blocked since February, severely disrupting the flow of crude, LNG and LPG to global markets.

Gulf supplies account for nearly half of India's oil

India imported 1.8 billion barrels of crude in 2025, with 48 percent coming from Gulf producers like Saudi Arabia, Iraq, the UAE, Kuwait and Qatar.

India is already diversifying suppliers

India now buys crude from more than 40 countries, with Russia, the US, Nigeria and Venezuela becoming important sources alongside traditional Gulf suppliers.

“Going forward, India will have to follow a multi-pronged strategy to safeguard its energy security.”

Alternative routes cost more and take longer

Rerouting Gulf crude through the Mediterranean or sourcing from other countries comes with higher risk premiums, longer voyage times and increased costs that directly affect affordability.

Strategic reserves need major expansion

India signed a deal with the UAE in May to increase Abu Dhabi's crude storage in India's strategic petroleum reserves to 30 million barrels, plus explore LNG and LPG storage facilities.

Refineries must handle different crude types

India's refineries are built for heavy, sour Gulf crude. Expanding to lighter crudes requires significant investment, though Reliance's Jamnagar refinery shows it's possible.

Fujairah and Oman offer backup routes

Fujairah on the UAE's Gulf of Oman coast and Omani ports like Duqm and Salalah sit outside the Strait of Hormuz and could serve as alternative storage and transhipment hubs.

LPG needs special handling and protection

LPG requires specialized, time-sensitive logistics and cannot stay at sea indefinitely. Alternative maritime routes themselves would need security protection, extending challenges to the western Indian Ocean.

India needs a complete energy strategy

Energy security requires combining supply diversification, strategic reserves, flexible refining capacity, alternative ports and protected maritime corridors, backed by strong bilateral relationships.

“India's ability to talk to each actor in the region at a bilateral level is crucial to being able to make any of these diversification channels work for us.”