The entry of the US into the Israel-Iran conflict has heightened tension in the Middle East. After Washington bombed three main nuclear facilities, Iran is considering shutting down the Strait of Hormuz - one of the world's most critical chokepoints. The Parliament of Iran has reportedly approved the closure of the Strait of Hormuz, and this has aggravated geopolitical tensions. However, Iran's Supreme National Security Council takes a final decision on such matters. India, the world's third-largest oil importer and fourth-biggest gas buyer, may have to face some consequences if Iran shuts down the Strait of Hormuz. But let's understand how severe the impact could be.
Why Is The Strait Of Hormuz Important For India?
Out of India's total import of 5.5 million barrels per day (bpd), about 2 million bpd of crude oil transits through the narrow Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman and the Arabian Sea.
According to the US Energy Information Administration (EIA), China imported 5.4 million bpd of crude through the Strait of Hormuz in the first quarter of 2025. India imported 2.1 million bpd, followed by 1.7 million bpd by South Korea, and 1.6 million bpd by Japan.
How Will Closer Of Strait Of Hormuz Impact India?
India has diversified its sources of imports, and imports oil from Russia, the US and Brazil, which can readily fill any void.
Russian oil is logistically detached from the Strait of Hormuz, flowing via the Suez Canal, Cape of Good Hope, or the Pacific Ocean. Though costlier, even the US, West African, and Latin American flows are increasingly viable backup options.
Indian refiners imported 2-2.2 million bpd of Russian crude oil in June - the highest in the last two years and more than the about 2 million bpd bought from Iraq, Saudi Arabia, the UAE and Kuwait, preliminary trade data from Kpler showed.
Also, imports from the United States rose 439,000 bpd in June, a big jump from the 280,000 bpd purchased in the previous month.
While there might not be any immediate impact on India, the heightened tensions could have a near-term impact on prices, as experts expect that oil prices will likely jump to USD 80 per barrel.
Benchmark Brent crude oil prices have already increased by up to 10 per cent since the conflict started. It shot up to USD 77 per barrel.
However, India still sources about 40 per cent of its supplies from Middle East nations such as Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait. These countries export crude oil to India through the Strait of Hormuz route.
India Has Enough Energy Supplies
Commenting on this, Oil Minister Hardeep Singh Puri said India has enough energy supplies to meet requirements for several weeks.
"Under the leadership of PM @narendramodi Ji, we have diversified our supplies in the past few years and a large volume of our supplies do not come through the Strait of Hormuz now," he said in a post on X.
India can also release oil from its strategic reserves (covering 9-10 days of imports) to bridge any shortfall.
India imports more than 85 per cent of its crude oil needs and roughly half of its natural gas requirement. On gas, India's principal supplier Qatar does not use the Strait of Hormuz for supplies to India.
India's other sources of liquefied natural gas (LNG) in Australia, Russia and the US would be untouched by any closure.
While crude oil is turned into fuels like petrol and diesel in refineries, natural gas is used for generating electricity, making fertilisers, and turned into CNG for running automobiles or piped to household kitchens for cooking. Liquefied natural gas is used to make fertilisers, generate electricity, and turned into CNG to run automobiles and piped to household kitchens for cooking.