What Happened
- At least 10 foreign-flagged ships carrying energy supplies destined for India remain stranded in the Persian Gulf as Iran's de facto blockade of the Strait of Hormuz continues in the wake of the US-Israel-Iran conflict.
- Separately, 18 India-flagged vessels loaded with LPG, crude oil, and LNG are anchored west of the Strait, unable to transit safely.
- Of the 10 foreign-flagged ships bound for India, three carry liquefied petroleum gas (LPG), four are crude oil tankers, and three transport liquefied natural gas (LNG).
- Over 2 million tonnes of Indian energy cargo — LPG, LNG, crude oil — is estimated to be stranded in the Persian Gulf.
- Marine insurance premiums in the Persian Gulf have surged from approximately 0.04% of insured value to as high as 0.7% — a 17-fold increase — as the Strait and surrounding waters have been classified as High Risk Areas (HRAs).
- Only 21 tankers have transited the Strait since the conflict began on February 28, 2026, compared to more than 100 ships per day before the crisis.
- India's government has been negotiating for safe passage for its vessels; two Indian-flagged tankers carrying LPG were reported to have transited safely with India's assurance of "friendly nation" status.
Static Topic Bridges
The Strait of Hormuz and India's Energy Import Dependency
The Strait of Hormuz is a 33-kilometre-wide waterway linking the Persian Gulf to the Gulf of Oman, and is the world's single most important energy transit chokepoint. Approximately 40% of India's crude oil, more than 50% of its LNG, and about 90% of its LPG imports transit this waterway. India imports roughly 88–89% of its crude oil requirements, making any disruption to Hormuz transit a direct national energy security emergency. Over 60% of India's crude imports originate from Persian Gulf countries (Iraq, Saudi Arabia, Kuwait, UAE), virtually all of which can only reach India via the Strait. At its narrowest, the navigable shipping lane within the Strait is only about 3.2 kilometres wide in each direction.
- ~40% of India's crude oil transits through Hormuz
- ~50%+ of India's LNG imports transit through Hormuz (primarily from Qatar)
- ~90% of India's LPG imports transit through Hormuz
- 100+ ships transited daily before the conflict; only 21 transited in weeks after February 28, 2026
- Total global oil trade through Hormuz: ~15 million barrels/day (34% of global crude trade)
Connection to this news: The 10 stranded foreign ships and 18 Indian vessels represent a direct materialisation of India's Hormuz vulnerability — the cargo shortage will affect household cooking gas (LPG), power plants (LNG), and refinery operations (crude) simultaneously if not resolved.
Marine Insurance and War Risk Premiums
Marine insurance covers ships and their cargo against losses arising from navigation risks. When a sea area is declared a High Risk Area (HRA) due to piracy, conflict, or geopolitical instability, insurers apply War Risk Premiums (WRP) — additional charges on top of standard hull and cargo insurance. These premiums are typically expressed as a percentage of the insured value of the vessel and cargo. A 17-fold surge in premiums (from 0.04% to 0.7%) dramatically increases the cost of shipping, which is eventually passed on through the supply chain to consumers. During the Houthi attacks in the Red Sea in 2024, war risk premiums similarly spiked, causing many shipping companies to reroute around the Cape of Good Hope — adding 7,000 to 10,000 km and 10–14 days to voyages. Unlike the Red Sea, there is no viable alternative route around the Persian Gulf, making Hormuz irreplaceable.
- War Risk Premium surge: 0.04% → 0.7% of insured value (a 17-fold increase)
- High Risk Area (HRA) designation: applied by the Joint War Committee (JWC) of Lloyd's Market Association to the Persian Gulf and surrounding waters
- Standard hull and cargo insurance is separate from war risk cover
- Alternative to Hormuz for outbound Gulf cargo: Transarabian Pipeline (TAP, Saudi Arabia) and ADNOC's Habshan-Fujairah pipeline — but combined capacity is far below total Gulf export volumes
- The Cape of Good Hope rerouting option (used in Red Sea crisis) is NOT available for Persian Gulf shipping — there is no way to exit the Gulf except through Hormuz
Connection to this news: The 17-fold premium surge means that even ships that do risk transiting the Strait face dramatically higher costs, making stranded cargo uneconomical to insure for any but the most critical shipments.
India's Energy Security Diplomatic Architecture
India has built a multi-layered diplomatic architecture to protect its energy supply lines. The India-Gulf Cooperation Council (GCC) relationship is foundational — India's foreign minister visited Gulf capitals following the conflict onset to negotiate safe passage. India's "friendly nation" designation by Iran for selective Hormuz passage was secured through back-channel diplomacy, leveraging India's historically neutral posture toward Tehran. India has also deployed naval destroyers and frigates to the Gulf of Oman to escort LPG and crude tankers — an exercise of maritime power projection in direct service of energy security. The India-US 2+2 Ministerial dialogue has a specific strand on energy security cooperation. Additionally, India's outreach to Qatar (LNG supplier), the UAE (crude and LPG), and Saudi Arabia (crude) has been intensified to explore alternative delivery routes and emergency supply swaps.
- India-Iran relations: India maintained diplomatic ties throughout the sanctions period (2019–2026)
- India-GCC trade: ~$180 billion annually (including oil, remittances, gold)
- Indian Navy presence in Arabian Sea: regular patrolling under Operation Sankalp (initiated 2019)
- India's Strategic Petroleum Reserve (SPR): ~9.5 million tonnes at Padur, Mangaluru, Visakhapatnam
- Emergency LPG buffer: IOCL, BPCL, HPCL maintain ~20–25 days of operational inventory
Connection to this news: India's ability to secure partial safe passage for its vessels (2 LPG tankers transited) reflects the diplomatic capital India has built with Iran — a direct payoff of its non-aligned strategic autonomy posture in the face of an otherwise total blockade.
Impact on India's Downstream Energy Sector
LPG (Liquefied Petroleum Gas) is used by over 310 million Indian households for cooking under the Pradhan Mantri Ujjwala Yojana (PMUY) scheme. LNG (Liquefied Natural Gas) powers a significant share of India's gas-based power plants and city gas distribution networks. Crude oil feeds India's 23 refineries, with a combined capacity of approximately 254 million tonnes per year (the largest refining capacity outside the US and China). A sustained disruption to energy cargo flows would first affect LPG cylinder availability (the most direct household impact), followed by power generation disruptions in gas-dependent states, and then broader refinery throughput reductions. India's strategic petroleum reserve (SPR) is designed to cover approximately 9.5 days of national consumption — a buffer, but not a sustained solution.
- LPG beneficiaries under PMUY: over 100 million households (as of 2024)
- India's refinery capacity: ~254 million tonnes per year (23 refineries)
- India's top crude importers: Iraqi, Saudi, UAE, Russian crude
- India's gas-based power capacity: approximately 25,000 MW
- SPR buffer: ~9.5 million tonnes (~9.5 days of consumption)
Connection to this news: The 2 million+ tonnes of stranded LPG, LNG, and crude cargo represents a direct threat to India's domestic energy supply chain, with LPG scarcity having the most immediate visible impact on ordinary households.
Key Facts & Data
- Stranded foreign-flagged ships bound for India: 10 (3 LPG, 4 crude, 3 LNG)
- Stranded India-flagged vessels: 18 (LPG, crude, LNG)
- Total stranded Indian energy cargo: over 2 million tonnes
- Insurance premium surge: from ~0.04% to ~0.7% of insured value (17x increase)
- Ships transiting Hormuz post-conflict: 21 (vs. 100+ per day before)
- India's Hormuz dependency: ~40% crude, ~50%+ LNG, ~90% LPG
- Conflict onset: February 28, 2026
- India's SPR capacity: ~9.5 million tonnes across 3 locations
- PMUY LPG beneficiaries: 310 million+ households
- India deployed naval destroyers to Gulf of Oman for escort operations