The Hormuz Crisis Has Forced India to Rethink Its Energy Strategy
Iraq Is Keeping Its Syria Oil Route—Even If Hormuz Reopens Decades after electricity deregulation and… Felicity Bradstock is a writer and journalist based in Mexico City.
She writes for energy websites and covers several other industries, as well as writing… India has been battling to secure its energy security in recent months, as its heavy dependence on fossil fuel imports has made it highly vulnerable to a closure of the Strait of Hormuz.
Severe energy supply chain disruptions have prompted India to deepen its ties with the United States to secure sufficient liquefied natural gas (LNG) supplies and to reassess its plan to enhance energy security over the coming decades, with consideration of renewable energy expansion.
The months-long restrictions on energy trade through the Strait of Hormuz led to a rise in India’s crude weighted average price from $69 in March to over $114 per barrel in April.
This dramatic price increase exposed India’s vulnerabilities to supply chain constraints.
India is heavily dependent on imported oil, LNG, and liquefied petroleum gas (LPG), and the war in Iran has significantly driven up prices for all three fuels in recent months.
India is the world’sthird-largestoil importer,fourth-largestLNG importer, andsecond-largestLPG importer.
In terms of its domestic energy industry, it is the world’s fourth-largest refiner and fifth-largest exporter of refined petroleum globally.
The International Energy AgencyexpectsIndia to become the largest driver of global oil demand growth between now and 2030, as its population continues to grow and industrialisation accelerates.
Until recently, most of India's energy imports arrived via the Strait of Hormuz from Russia, while it exports refined products through the same route.
Around 45 per cent of India’s crude imports, 50 per cent of its LNG, and 90 per cent of its LPGpassed through the straitwhen it was fully operational.
India used to rely heavily on Iran for its oil; however, stricter sanctions on Iranian energy in recent years have led it toshift its dependenceto other Middle Eastern powers, including Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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