The next oil shock won't shake India like in the past. Story of a 90-day shift
The renewed US-Iran military confrontation has once again thrust the Strait of Hormuz into the centre of the global energy crisis, with fresh American strikes
The renewed US-Iran military confrontation has once again thrust the Strait of Hormuz into the centre of the global energy crisis, with fresh American strikes, Iranian retaliation, repeated threats to shut the strategic waterway and another attack on a merchant vessel carrying Indian seafarers, underscoring just how fragile one of the world's busiest oil chokepoints has become. For India, however, the latest crisis is unfolding very differently from the one that triggered months of fuel shortages globally. Read Full Story This is a story of how India diversified its crude imports, expanded spot-market purchases and reduced dependence on long-term Gulf contracts in the last 90 days. With the shift, India is better placed than it was in March to deal with global energy disruptions. The process to armour-clad energy security is still on. After disruptions to oil and gas supplies in March exposed the risks of relying heavily on the Gulf, New Delhi has quietly begun reshaping its energy security strategy. State-owned refiners have diversified crude purchases beyond the Middle East, increased spot-market buying, expanded imports from suppliers such as Russia, the United States and West Africa, and sought more flexible supply arrangements that reduce dependence on any single region. The strategy is designed to cushion India against geopolitical shocks exactly like the one now again unfolding in the Gulf. While the Strait of Hormuz remains a critical artery for global energy trade and any prolonged closure would still send oil prices soaring, India's broader supplier base and more flexible procurement model are expected to make it better equipped to withstand supply disruptions than it was just a few months ago. The shift gathered pace after state-owned refiners reviewed their procurement strategy following repeated attacks on commercial shipping and disruptions linked to the US-Israel-Iran conflict. According to Bloomberg, refiners have reduced their reliance on long-term contracts with traditional Middle Eastern producers and are increasingly turning to short-term purchases and broader supply agreements with global trading houses that source crude from multiple regions, helping ensure more reliable deliveries during geopolitical crises. INDIA'S HISTORIC DEPENDENCE ON MIDDLE EASTERN OIL India is one of the world's most import-dependent energy consumers, importing nearly 90% of its crude oil requirements, or around 5 million barrels per day, according to Reuters. For decades, much of this oil has come through long-term contracts with major Middle Eastern producers such as Saudi Arabia and Iraq.
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