India is confronting its most severe energy security challenge in decades as the escalation of hostilities between the United States, Israel, and Iran — which intensified on February 28, 2026 — has effectively choked the Strait of Hormuz, a maritime corridor that, according to publicly available shipping data, typically facilitates the transit of approximately 21 million barrels of oil and related products daily. As of March 15, traffic through the strait has fallen by an estimated 80%, according to reporting cited in documents from the Institute for International Affairs (IAI) and corroborated by multiple Indian government statements. Global benchmark Brent crude, which traded near $72 per barrel before the conflict’s onset, surged to peaks near $119 and has settled near $100.5 as of mid-March, according to market data cited in the research compilation.
For India — which imports approximately 85% of its crude oil and, according to government sources, roughly 60% of its liquefied petroleum gas (LPG) — the disruption represents a direct and immediate threat to domestic energy stability and broader macroeconomic momentum.
Strategic Petroleum Reserves: Buffer, Not Lever
India maintains Strategic Petroleum Reserves (SPR) in underground rock caverns at three locations: Visakhapatnam, Mangaluru, and Padur. According to Wikipedia’s entry on India’s Strategic Petroleum Reserve and corroborated by a Drishti IAS analysis of government disclosures, these facilities currently hold approximately 5.33 million metric tonnes (MMT) of crude oil, providing a net import coverage of roughly 9.5 days in isolation. When combined with commercial inventories held by Oil Marketing Companies (OMCs) at refineries and ports, India’s total buffer is estimated at approximately 74 days, according to the same sources.
When the International Energy Agency announced a record coordinated release of 400 million barrels from member-state reserves to stabilise global prices, New Delhi opted out. Government sources, as reported by The Tribune and ANI, described India’s posture as an “India First” strategy, maintaining that its SPRs are intended exclusively for domestic supply dry-outs rather than participation in global price-management exercises. The Ministry of Petroleum and Natural Gas has not issued a contradicting statement to these reports.
Diversification: The 40-Country Supply Network
Prior to the conflict, approximately 45% of India’s crude imports transited the Strait of Hormuz. The Ministry of Petroleum and Natural Gas has accelerated a diversification drive that, according to government sources cited in the research documents, has expanded India’s sourcing network to 40 countries — up from 27 in the 2006-07 period. Non-Hormuz sourcing now accounts for an estimated 70% of crude imports, with increased volumes being secured from the United States, Russia, Norway, Canada, and Algeria, according to the same sources. These figures have not been independently verified through primary ministry filings but are attributed to government disclosures.
Critical energy infrastructure across the Gulf region has been severely disrupted. According to the research compilation, facilities including storage sites on Kharg Island in Iran and export terminals at Ras Tanura in Saudi Arabia and Ras Laffan in Qatar have faced significant operational disruptions. The Yanbu pipeline in Saudi Arabia, which provides an alternative route bypassing the Strait, is reported to be partially operational, according to the same sources. The original primary documentation underpinning these infrastructure assessments could not be independently verified for this report.
Diplomatic Engagement
Prime Minister Narendra Modi has held direct talks with Iranian President Masoud Pezeshkian regarding the need for “unhindered transit” of energy-carrying vessels, according to reporting by The Hindu. Iranian representatives in New Delhi have, according to government sources cited in the research documents, signalled that neutral Indian vessels may be allowed passage despite broader restrictions on shipping linked to the United States, Europe, and Israel. The Ministry of External Affairs has stated it remains in constant touch with regional stakeholders to ensure the “safe and unimpeded transit” of Indian-flagged vessels.
Domestic Consequences
The most visible domestic consequence has been the emergence of LPG supply pressures in northern India, particularly Punjab and Uttar Pradesh. The Union government has categorised this as a “demand distortion” driven by panic buying rather than a production failure, as stated by Petroleum Minister Hardeep Singh Puri in Parliament and reported by The Hindu on March 12. Two Indian-flagged LPG carriers, Shivalik and Nanda Devi, successfully transited the Strait on March 14 carrying a combined 92,700 metric tonnes of cooking gas, according to a statement from the Secretary of the Shipping Ministry carried by ANI. Their scheduled arrival at Mundra and Kandla ports on March 16 and 17 respectively is expected to provide meaningful, if temporary, supply relief.
Fuel rationing fears for petrol and diesel have been formally dismissed. Joint Secretary Sujata Sharma of the Ministry of Petroleum and Natural Gas stated that India is self-sufficient in the production of both fuels and that no imports are required. All IndianOil terminals are reported as fully stocked, with refineries operating at 100% capacity or above, according to government sources cited in the research.
India’s Q3 FY26 GDP growth of 7.8%, reported by the Ministry of Statistics and Programme Implementation, provides a significant macroeconomic buffer. However, the localised energy disruptions, a widening Current Account Deficit reported at 1.3% of GDP in early FY26, and escalating global shipping costs represent meaningful risks to sustaining that trajectory through the remainder of the fiscal year.
