India Grapples with Oil Supply Security Amid US-Iran Tensions in the Strait of Hormuz

India's Oil Imports Through Strait of Hormuz Rise Amid Geopolitical Uncertainties

Key Figures:

• 2.6 million bpd: India's crude oil imports through the Strait of Hormuz as of February 2026
• 50%: Share of India's total monthly oil imports passing through the Strait of Hormuz as of January-February 2026
• $71: Brent prices as of February 26, 2026
• 74 days: Duration India's strategic petroleum reserves can last to meet energy demands in case of geopolitical shocks

India's Diversification Efforts

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In response to escalating tensions between the US and Iran, India is accelerating its purchases of crude oil from alternative suppliers, deepening term-contracts, and drawing up its strategic petroleum reserves. As of February 2026, India's crude oil imports through the Strait of Hormuz have increased to 2.6 million barrels per day (bpd), up from 2 million bpd last year.

Supply Chain Risks

A disruption at the Strait of Hormuz would have significant implications for India and global oil markets, with roughly 2.6 million bpd of India's crude imports transiting the Strait, primarily from Iraq, Saudi Arabia, the UAE, and Kuwait. India may explore securing crude routed through bypass infrastructure, such as Saudi Arabia's East-West pipeline and the UAE's Abu Dhabi Crude Oil Pipeline, but their capacity is finite and prioritized for producer export strategies.

Alternative Sourcing Options

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India may turn to alternative suppliers, including Russia, the United States, West Africa (Nigeria, Angola), Latin America (Brazil, Colombia, Venezuela), and the Middle East. However, these alternatives come with higher freight costs compared to Middle Eastern barrels, which would modestly increase landed crude costs in the short term.

Market Implications

A disruption at the Strait of Hormuz would drive oil markets higher, increasing India's import costs. Brent prices were hovering around $71 per barrel on February 26, 2026. A blockade would likely trigger a sharp geopolitical risk premium, driving Brent prices higher even before physical shortages materialize.

Strategic Petroleum Reserves

India presently has a reserve capacity of 5.3 million tonnes and is working to establish two additional commercial-cum-strategic petroleum reserve facilities with total storage capacity of 6.5 million tonnes. The country's strategic petroleum reserves can last 74 days to meet energy demands in case of geopolitical shocks.