What Happened
- The ongoing US-Israel war against Iran and the resulting Strait of Hormuz crisis have prompted a retrospective examination of how geopolitical shocks have historically driven India's energy policy evolution.
- Six key conflicts identified as inflection points: the 1973 OPEC Oil Embargo, the 1979 Iranian Revolution, the 1990 Gulf War, the 2010 Iran sanctions, the 2022 Russia-Ukraine war, and the current 2025-26 US-Israel-Iran conflict.
- Each crisis exposed India's energy vulnerability and pushed incremental diversification — but India remains structurally dependent on imported hydrocarbons (88.6% of crude oil, ~85-90% of LNG from West Asia).
- The current Hormuz crisis has cut off approximately 54% of India's LPG supplies and 30% of its LNG supplies, triggering the most severe fuel supply disruption in decades.
- Analysts and policymakers see this as a moment to structurally accelerate diversification — towards domestic production, renewables, and suppliers outside the Gulf.
Static Topic Bridges
India's Historical Energy Import Dependence and Diversification Journey
Before 1973, India relied heavily on Western oil companies (Shell-Burmah, Esso, Caltex) and imported most crude from West Asia. The 1973 OPEC embargo triggered two pivotal responses: Indira Gandhi's nationalisation of the three Western oil firms (which became the basis of BPCL, HPCL, and Indian Oil), and a pivot toward Soviet oil imports. The 1991 Gulf War combined with the Soviet Union's collapse forced another diversification. After 2010, US and UN sanctions on Iran — previously India's third-largest supplier — drove India to reduce Iranian oil from over 10% of imports to near zero by 2020. India now sources crude from over 40 countries (up from 27 two decades ago), with Russia emerging as the top supplier after the 2022 Ukraine war (discounted crude).
- 1973: Nationalisation of Shell-Burmah, Esso, Caltex — origins of BPCL, HPCL.
- India's crude suppliers pre-2022: primarily Saudi Arabia, Iraq, UAE, Kuwait.
- Post-2022 war: Russia became India's top crude supplier (discounted price arbitrage).
- India now imports crude from 40+ countries — up from 27 two decades ago.
- India imported 88.6% of crude oil requirements in April-January FY26 (206.3 million tonnes).
Connection to this news: Each geopolitical conflict forced India to add new supplier relationships rather than replacing old ones — creating a diversified but still Hormuz-dependent supply chain, as 40% of crude, 50% of LNG, and 90% of LPG still transit through the Strait.
Strait of Hormuz — World's Most Critical Energy Chokepoint
The Strait of Hormuz is a narrow waterway (minimum 33 km navigable width) between Iran and Oman that connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. It is the world's most important oil chokepoint: in 2024, an average of 20 million barrels per day (20% of global petroleum consumption) transited through it. Around one-fifth of global LNG trade also passes through the Strait, primarily from Qatar. For India, it is not merely a transit route — it is a lifeline, with 40% of crude oil, 50% of LNG, and 90% of LPG imports dependent on Hormuz passage. Saudi Arabia (38% of Hormuz crude flows), Iraq (22.8%), and UAE (12.9%) are the major exporters.
- Location: between Iran (north) and Oman (south); connects Persian Gulf with Gulf of Oman.
- Width: approximately 60 km total; two 3-km-wide shipping lanes in each direction.
- Daily oil flows (2024): 20 million barrels/day — about 20% of global petroleum consumption.
- LNG share: approximately 20% of global LNG trade, primarily Qatar.
- India's LPG import dependence on Hormuz: approximately 90%.
- Alternative routes: Saudi Arabia's East-West Pipeline (capacity: 5 mb/d) and UAE's Abu Dhabi Crude Oil Pipeline are partial bypass options.
Connection to this news: The Hormuz crisis directly translates into India's current fuel shortages — there is no readily scalable alternative that bypasses Iran's ability to threaten or close the Strait, making diplomatic resolution of the Iran conflict existential for India's energy security in the near term.
India's Energy Security Framework — Strategic Petroleum Reserves and Long-Term Policy
India established its Strategic Petroleum Reserve (SPR) programme after recognising vulnerability during the 2003 Iraq War. The first three underground rock cavern SPRs at Vishakhapatnam (1.33 million tonnes), Mangaluru (1.5 million tonnes), and Padur (2.5 million tonnes) were completed under the Indian Strategic Petroleum Reserves Limited (ISPRL). Total capacity is ~5.33 million tonnes (~39 million barrels) — enough for roughly 9-10 days of India's consumption. The government is expanding to Phase 2 sites at Chandikhol (Odisha) and Padur (additional). India is also seeking to attract $100 billion in domestic oil and gas exploration investment by 2030 to reduce import dependence.
- SPR Phase 1 sites: Vishakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), Padur (Karnataka).
- Total Phase 1 capacity: ~5.33 million tonnes (~39 million barrels) — about 9-10 days of consumption.
- SPR Phase 2: planned at Chandikhol (Odisha) and expanded Padur.
- India imports ~90% of crude oil requirements — among the highest import dependencies globally.
- Target: attract $100 billion in domestic exploration investment by 2030.
Connection to this news: The current crisis has again highlighted the inadequacy of India's SPR (only ~10 days' cover versus the IEA standard of 90 days for member countries), reinforcing the case for both larger strategic reserves and accelerated domestic production.
Key Facts & Data
- India's crude oil import dependence: 88.6% of requirements in April-January FY26
- West Asia share of India's crude imports: 46.9%
- OPEC countries' share: 50.1% of India's crude imports
- Current crisis LPG supply disruption: ~54% of India's LPG supplies cut off
- Current crisis LNG supply disruption: ~30% of India's LNG imports disrupted
- Strait of Hormuz daily oil throughput (2024): 20 million barrels/day (~20% of global consumption)
- India's LPG import route via Hormuz: ~90%
- India now imports from: 40+ countries (up from 27 two decades ago)
- SPR capacity (Phase 1): ~5.33 million tonnes (~39 million barrels, ~9-10 days of consumption)
- Domestic exploration investment target by 2030: $100 billion