Oil shipments through the crucial energy corridor of the Strait of Hormuz have dropped sharply amid the IsraelโIran conflict. The disruption at this key international waterway, through which nearly 20 per cent of the worldโs oil supply passes, has reportedly led to around 700 tankers being stranded on either side of the narrow strait.
Shipowners are avoiding the volatile region, raising concerns over crude oil and liquefied petroleum gas (LPG) supplies for India and other major importers.
According to reports, global oil flows through the strait have declined by nearly 86 per cent, with only a limited number of vessels managing to pass through on March 1 compared with normal daily volumes. As a result, Brent crude prices have surged nearly 10 per cent to around USD 80 a barrel.
European gas prices have also jumped more than 40 per cent after attacks hit Saudi Arabiaโs Ras Tanura refinery and a Qatari LNG plant, intensifying fears of supply disruptions.
Why the Shipping Slowdown Matters
The Strait of Hormuz is one of the worldโs most critical energy chokepoints. A substantial portion of global crude oil and liquefied natural gas (LNG) shipments, including supplies bound for India, transit through this route.
Analysts caution that any prolonged slowdown or blockade could trigger significant disruptions in global energy markets, leading to higher fuel prices and supply constraints.
India’s Vulnerability to Hormuz Disruption
India imports a large share of its crude oil requirements and nearly all its LPG through the Strait of Hormuz. If disruptions continue for several weeks, domestic fuel availability could come under strain, potentially pushing prices higher.
Sources indicate that Indiaโs combined crude oil and petroleum product inventories, including strategic reserves, are sufficient to meet approximately 70 to 75 days of demand. Dedicated crude storage accounts for around 17 to 18 days of supply, while refined fuel inventories can cover about 20 to 21 days.
This buffer is expected to support immediate consumption needs while alternative sourcing and supply arrangements are put in place.
Indiaโs Contingency Planning Underway
Indian authorities are reviewing energy security measures to ensure stable domestic supplies even if the Strait of Hormuz remains restricted.
Officials have stated that โall necessary stepsโ will be taken to maintain the availability and affordability of key petroleum products in the country.
With refined fuel exports forming a significant share of output, government sources have indicated that export policies and inventory management strategies may be adjusted if disruptions persist.
In a statement posted on X, the oil ministry said: โWe are continuously monitoring the evolving situation, and all necessary steps will be taken in order to ensure availability and affordability of major petroleum products in the country.โ
Countries Likely to Be Most Affected
A majority of the crude oil transported through the Strait of Hormuz is destined for Asia. China, India, Japan and South Korea together account for nearly 70 per cent of these shipments, according to the US Energy Information Administration.
Any extended disruption could therefore disproportionately affect major Asian economies dependent on Middle Eastern energy supplies.
What Could Lie Ahead
The situation remains fluid, but analysts warn that sustained disruption in oil flows through Hormuz could have broader economic consequences:
Higher freight and war-risk insurance costs may push global fuel prices further upward.
Prolonged stress could widen Indiaโs oil import bill and increase pressure on the current account.
Energy-intensive sectors such as transportation and manufacturing may face higher input costs, affecting overall economic activity.
As geopolitical tensions continue, global markets will closely monitor developments around the Strait of Hormuz, given its central role in the worldโs energy supply chain.
ย
ALSO READย |ย YEIDA to develop several new sectors near Jewar Airport, acquires 2,700 acre of landย