India faces no immediate energy crisis amid Hormuz tensions, strategic reserves offer cushion

As geopolitical tensions rise in West Asia, particularly around the Strait of Hormuz, the Indian government does not expect any immediate energy supply crisis, thanks to strategic reserves and supply diversification options.

Government officials indicate that India currently has sufficient buffer stocks to manage short-term disruptions. Strategic reserves can support LPG and LNG demand for about 15 days, while crude oil reserves are estimated to last up to 45 days in the event of supply disturbances.

This preparedness comes at a time when concerns are mounting globally over the Strait of Hormuz — a key maritime chokepoint through which a significant portion of India’s crude oil and liquefied natural gas (LNG) imports transit.

Despite the heightened tensions, officials suggest that even in the event of a prolonged disruption or closure of the Strait, India retains the flexibility to pivot its energy sourcing to alternative markets to meet domestic demand.

While physical supply disruptions appear unlikely in the near term, energy markets have already begun reacting to the geopolitical uncertainty.

Brent crude prices have climbed toward a seven-month high of around $73 per barrel, reflecting the addition of a geopolitical risk premium. This rise in prices is being closely watched for its potential impact on inflation and India’s current account balance.

The Strait of Hormuz remains one of the world’s most critical energy transit routes, with nearly 20% of global petroleum liquids and a similar share of LNG shipments passing through it. Any sustained disruption in the region could therefore have cascading effects on global energy markets, even if actual supply flows remain intact in the short term.

India’s ability to draw upon strategic reserves and reconfigure sourcing routes provides a crucial buffer against near-term volatility. Policymakers are also monitoring developments closely to assess potential second-order impacts such as price volatility, shipping delays, and insurance costs.