Geopolitical Risk Analysis Impact of the Iran–Israel–U.S. Conflict on India’s Oil & Gas Markets

India meets over 85% of its crude needs through imports, drawing heavily from Iraq, Saudi Arabia, the UAE, and Kuwait. Russia has emerged as an important counterweight since 2022, but the Gulf still dominates. And unlike many importers, India does not just consume, its refining complex, running at over 5 million barrels per day, feeds export markets across Europe and Africa. That dual role amplifies both the upside and the downside of global price swings. The Strait of Hormuz is where India's exposure becomes most acute. A sustained disruption to this chokepoint, whether through direct conflict, shipping insurance seizures, or maritime security breakdowns, would tighten supply globally and push freight costs sharply higher. The pain would extend beyond crude oil: Qatar, which is India's primary LNG source under long term agreements, ships through the same corridor. Under a serious disruption scenario, India's import bill would balloon. The consequences would ripple inward through currency pressure, inflation across fuel and food supply chains, and mounting stress on oil marketing companies caught between rising procurement costs and politically sensitive retail prices. India's near-term toolkit is real but limited. Strategic petroleum reserves currently cover only one to two weeks of import demand. Spot LNG purchases can fill some gas supply gaps, though at a steep cost premium during tight markets. Russia, the United States, Brazil, and West African producers offer alternative crude sources, but grade differences and logistics create genuine substitution constraints in the short run. The policy response will likely unfold on two tracks. Immediately: targeted price support, refinery coordination, and bilateral energy diplomacy. Over time: faster diversification of supply, expanded strategic storage, renewed domestic upstream investment, and a push toward renewable capacity, LNG infrastructure, and green hydrogen. Each of these was already on the agenda. The current situation simply raises the urgency considerably. The broader lesson is one India has confronted before, though rarely under such direct pressure: energy security for a major importing economy is never fully settled. It requires continuous investment in both relationships and resilience. Show more