Hormuz to home, India’s resilience in uncertain times
Following the closure of the Strait of Hormuz by Iran in March 2026 — triggered by the US-Israel military operation on Iran — India faced an acute energy supply disruption, given that approximately 50% of its crude oil imports and the bulk of its LPG supplies transit the strait.
India's crude basket price surged from approximately $69 per barrel in February 2026 to over $113–114 per barrel by March–April 2026, representing one of the steepest short-term price shocks in recent memory.
India responded through a calibrated, multi-track strategy: rerouting roughly 70% of crude imports away from Hormuz (up from 55%), absorbing additional volumes of sanctioned Russian crude under US waivers, and resuming purchases of Iranian oil and gas after a seven-year hiatus (last purchased in 2019).
India deepened port capacity at Mundra (Gujarat) to receive Very Large Crude Carriers (VLCCs), with the first VLCC terminal having been commissioned in January 2026 as a structural response to chokepoint vulnerability.
Indian diplomatic coordination with Gulf states, Russia, and the United States was cited as central to managing the supply chain under crisis conditions.
Three Indian nationals were killed and 20 injured across West Asia during the escalation phase, reflecting India's significant diaspora exposure in the Gulf.
The Strait of Hormuz — Geography, Strategic Significance, and India's Dependence
The Strait of Hormuz is a narrow waterway separating Iran (to the north) and Oman (to the south), connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. At its narrowest point it is approximately 34 kilometres (21 miles) wide, with two navigable shipping lanes of approximately 3 kilometres each separated by a 3-kilometre buffer zone. The shipping lanes pass primarily through Omani territorial waters via the Musandam Peninsula, with some portion in Iranian territorial waters.
The Strait is the world's most critical oil transit chokepoint: an average of approximately 20 million barrels per day (mb/d) of crude oil and petroleum products transited it in 2025, representing roughly 20% of total global seaborne oil trade. Major exporting countries using the Strait include Saudi Arabia, the UAE, Iraq, Kuwait, and Qatar. There is no maritime bypass — the only land alternative (the Abqaiq-Yanbu pipeline in Saudi Arabia) has limited capacity.
Key Details
- Volume of oil transiting Hormuz (2025 average): ~20 million barrels per day (~20% of global seaborne oil trade).
- Countries most exposed: Japan (~90% of oil imports via Hormuz), South Korea (~75%), China (~40%), India (~50%).
- India is the world's third-largest oil importer and one of the largest LPG consumers; Gulf region accounts for ~55–60% of India's crude sourcing.
- No viable maritime bypass exists for Hormuz; the Strait's closure forces rerouting via the Cape of Good Hope, adding 15–20 days to voyage times and significantly increasing costs.
India's acute price shock (crude basket nearly doubling from February to April 2026) and emergency rerouting are direct consequences of Hormuz dependence. Mundra's VLCC terminal — commissioned months before the crisis — illustrates how strategic infrastructure investment can partially buffer chokepoint risk.
International Law and the Right of Transit Passage (UNCLOS)
Under the United Nations Convention on the Law of the Sea (UNCLOS), Part III (Articles 34–45), all ships and aircraft — including military vessels — enjoy the right of "transit passage" through international straits used for international navigation. Transit passage applies specifically to straits connecting one area of the high seas (or exclusive economic zone) to another, which describes the Strait of Hormuz. Unlike "innocent passage" (which coastal states can regulate or suspend), transit passage rights cannot be suspended even in times of tension or armed conflict.
A critical complication: Iran has not ratified UNCLOS. Iran instead asserts that navigation through the Strait is governed by a 1958 bilateral treaty with Oman, and that the right of passage is conditional. This legal position underpins Iran's recurring threats to block or restrict Hormuz — which are contested by most maritime powers.
Key Details
- UNCLOS was adopted in 1982 and entered into force in 1994; 168 states are party to it (India ratified in 1995; Iran has not ratified).
- Article 38 of UNCLOS: right of transit passage for all ships and aircraft through international straits; cannot be suspended.
- "Innocent passage" (applicable in territorial seas under Article 17) may be suspended for security reasons by coastal states — but this regime does not apply to international straits with transit passage rights.
- Iran has historically maintained that foreign warships require prior notification before entering Iranian territorial waters, a position rejected by the US and most maritime powers.
Iran's closure announcement (March 2026) was legally contested by the US, India, and other maritime nations precisely on the basis of transit passage rights under UNCLOS. The crisis has renewed calls for India to formalise its position on freedom of navigation and UNCLOS-based maritime order.
India's Energy Security Architecture — Strategic Petroleum Reserves and Diversification
India's energy security strategy rests on three pillars: diversification of supply sources, development of strategic petroleum reserves (SPR), and investment in domestic alternatives (renewables, gas, nuclear). The Pradhan Mantri Urja Ganga and strategic reserve infrastructure form the institutional backbone.
India's Strategic Petroleum Reserve (SPR) programme, managed by the Indian Strategic Petroleum Reserves Limited (ISPRL), currently operates underground rock cavern facilities at Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), and Padur (2.5 MMT) — a combined capacity of approximately 5.33 million metric tonnes (roughly 39 million barrels), sufficient for approximately 9–12 days of consumption. Phase 2 expansions at Chandikhol (Odisha) and Padur are planned.
Key Details
- ISPRL established under the Ministry of Petroleum and Natural Gas; created post-2003 Strategic Petroleum Reserve Programme.
- Current SPR capacity: ~5.33 MMT (3 locations); proposed Phase 2 would add ~6.5 MMT.
- India's daily crude consumption: approximately 5.2 million barrels/day (FY2025); strategic reserves cover less than 2 weeks.
- The IEA recommends member countries hold at least 90 days of net import cover; India holds significantly less.
- India is not a full IEA member (it has an "Association" status); the IEA emergency oil-sharing mechanism does not automatically apply.
- The Mundra VLCC terminal (commissioned January 2026) expands India's ability to receive large non-Gulf cargoes (US, West African, South American crude).
The crisis exposed the gap between India's strategic reserve coverage (~9–12 days) and the recommended 90-day buffer. The rapid rerouting to Russian and non-Hormuz supply — reaching 70% — demonstrates supply-side resilience, but the price impact ($69 → $113/barrel) underscores the limits of market-based hedging without deeper reserves or long-term supply contracts insulated from spot-market shocks.
India's Gulf Diaspora and Remittance Dependence
India's strategic calculus in West Asia extends beyond energy to the welfare of approximately 9 million Indian nationals working in the Gulf Cooperation Council (GCC) countries. This diaspora is the largest of any nationality in the Gulf region, and remittances from the Gulf constitute the largest share of India's total remittance receipts. In FY2024-25, total remittances to India reached approximately $129 billion (World Bank estimate), with the UAE, Saudi Arabia, Kuwait, Oman, Qatar, and Bahrain collectively accounting for the largest share.
Any military escalation in West Asia thus creates a dual exposure for India: energy supply disruption and diaspora/remittance vulnerability.
Key Details
- Indian nationals in GCC countries: approximately 9 million (largest diaspora community in the Gulf).
- India's total remittance receipts: ~$129 billion (FY2025), world's largest recipient.
- Gulf's share of India's remittances: approximately 35–40% of total inflows.
- Ministry of External Affairs operates an Emergency Evacuation Protocol; 3 Indians killed and 20 injured during the 2026 West Asia escalation.
- The "Vande Bharat Mission" (COVID-era) and Operation Kaveri (Sudan, 2023) demonstrated India's operational evacuation capability.
India's calibrated, non-aligned diplomatic posture during the Iran-Israel-US conflict — resuming Iranian oil purchases while maintaining relations with the US and Gulf states — reflects the need to protect both energy supply lines and diaspora welfare simultaneously, without aligning exclusively with any belligerent.
- Strait of Hormuz width at narrowest point: approximately 34 km (21 miles).
- Daily oil transit through Hormuz (2025 average): ~20 million barrels/day (~20% of global seaborne oil trade).
- India's crude basket price: ~$69/barrel (February 2026) → ~$113–114/barrel (March–April 2026).
- India's share of crude imports via Hormuz (pre-crisis): ~50%; rerouted to ~70% non-Hormuz by May 2026.
- India's Strategic Petroleum Reserves capacity: ~5.33 MMT at three locations (Visakhapatnam, Mangaluru, Padur).
- India's daily crude consumption: ~5.2 million barrels/day (FY2025).
- UNCLOS Article 38: right of transit passage; cannot be suspended; Iran has not ratified UNCLOS.
- Indian diaspora in GCC countries: ~9 million persons.
- India's total remittances (FY2025): ~$129 billion (world's largest recipient).
- Mundra VLCC terminal commissioned: January 2026.
- India resumed Iranian oil imports in 2026 — first purchases since 2019.