Decoding India’s energy security vis-à-vis Israel-Iran War

Prime Minister Modi has spoken with his Israeli counterpart Benjamin Netanyahu urging de-escalation

• India's LPG supply hit by Strait of Hormuz closure
• Government invoked ESMA to maintain smooth energy supply chains
• India's varied oil imports and reserves ensure energy stability

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The temporary disruption in LPG supplies that parts of India are currently witnessing is a reminder of how deeply interconnected the global energy system has become. The closure of the Strait of Hormuz amid escalating tensions in West Asia has created a sudden shock to energy logistics across the world. Several countries dependent on Gulf energy supplies are facing similar disruptions.

India too has felt the immediate impact in the form of delays in LPG distribution in some regions. The government has responded swiftly, invoking the Essential Services Maintenance Act (ESMA) to ensure that supply chains continue to function smoothly. Officials have indicated that the disruption is logistical rather than structural and that the situation is expected to stabilise over the next few days as alternative supply routes and inventories are activated.

Moments like these test not only the resilience of energy systems but also the maturity of political discourse. The Strait of Hormuz is one of the world’s most critical energy chokepoints; when it is disrupted, the entire global supply chain feels the tremors. In such a black swan moment triggered by extraordinary geopolitical circumstances, responsible politics demands calm assessment rather than alarmism.

Unfortunately, sections of the Opposition have attempted to portray a temporary logistical disruption as a systemic collapse. Such reactions risk creating unnecessary panic. At a time when the entire world is grappling with energy turbulence, political actors would do well to rise above partisan instincts. In moments of national challenge, the Opposition should behave as a responsible stakeholder rather than the country’s black sheep.

The reality, however, is that despite the present disruption, India remains among the best prepared countries to handle an energy shock of this magnitude. Over the past decade, the Narendra Modi government has systematically strengthened the country’s energy security architecture.

Energy security has always been one of the most fundamental pillars of India’s national security strategy. For a country that is among the world’s largest consumers of crude oil and whose economic growth depends heavily on reliable energy supply, disruptions in global oil markets can have immediate consequences for inflation, trade balances and economic stability. Recognising this vulnerability, the Modi government has spent the past decade methodically strengthening India’s energy security architecture. This transformation has not been driven by a single policy decision but through a series of strategic steps: diversifying crude suppliers, building strategic petroleum reserves, expanding refining capacity and pursuing a balanced diplomatic strategy that safeguards India’s national interests.

Recent tensions in West Asia, particularly the Israel–Iran confrontation, have once again highlighted how critical these policies are. Despite escalating hostilities in a region that supplies a large share of global oil, India has largely insulated itself from an immediate energy crisis.

This stability is not accidental. It is the result of years of planning and policy execution that have fortified India’s energy security brick by brick.

Israel–Iran conflict and how India has ensured energy stability

West Asia remains the nerve centre of the global oil economy. Any conflict involving major regional powers—particularly Iran, which sits astride the strategic Strait of Hormuz—inevitably triggers fears of supply disruptions and oil price spikes.

India imports nearly 85 percent of its crude oil requirements, and historically a large share of this oil has originated from the Gulf. For decades, this dependence meant that geopolitical tensions in the region posed direct risks to India’s economic stability.

Yet despite the current tensions and disruptions in maritime traffic near the Strait of Hormuz, India’s energy supply chain has remained secure. A major reason for this resilience is diversification.

Over the last decade, India has systematically expanded the number of countries from which it imports crude oil. In 2025 alone, the number of supplier nations increased from 27 to 40. This diversification ensures that no single geopolitical crisis can cripple India’s supply chain. Even new producers such as Argentina have been added to the list of suppliers.

India also maintains substantial energy buffers. Currently, the country holds between six and eight weeks of crude and fuel inventory. Commercial refiners maintain roughly 25 days of stock, while strategic petroleum reserves add further coverage. When combined, India possesses the ability to withstand supply shocks for up to 70 days.

Strategic petroleum reserves have played a particularly crucial role. Underground storage caverns at Visakhapatnam, Mangaluru and Padur together provide around 5.3 million tonnes of crude storage capacity, equivalent to nearly ten days of import cover. In addition, India maintains approximately 144 million barrels of onshore crude storage.

Another pillar of India’s resilience has been its pragmatic approach to energy sourcing. Following geopolitical shifts in global markets, India significantly increased purchases of discounted Russian crude. By 2025, Russia accounted for roughly 35 percent of India’s oil imports, with volumes reaching nearly 1.8 million barrels per day. These purchases helped stabilise India’s energy supply while insulating domestic markets from global price volatility.

The government has also moved swiftly during the present crisis. The Cabinet Committee on Security reviewed contingency options including supply diversification and maritime security. State-run refiners such as Indian Oil, Bharat Petroleum and Hindustan Petroleum have already explored alternative crude supplies from the Atlantic Basin, including the United States, West Africa and Latin America.

While shipments from these regions involve longer transit times compared to the Gulf, India’s diversified supplier network ensures that viable alternatives exist if required.

The Congress era record – A stark contrast

The significance of India’s current energy security framework becomes clearer when compared with the situation during earlier years.

During the United Progressive Alliance (UPA) period, India’s energy supply structure was significantly more vulnerable to geopolitical shocks. One major weakness was the lack of diversification in crude imports. Several Indian refineries were heavily configured to process Iranian heavy crude, making India excessively dependent on a single supplier.

When international sanctions were imposed on Iran in 2012–13, India found itself unprepared. Crude imports from Iran dropped by more than 26 percent in a single year, forcing refiners to scramble for alternative cargoes.

The crisis exposed the absence of a coherent contingency plan. At the time, India lacked meaningful strategic petroleum reserves capable of cushioning supply shocks.

Financial arrangements for paying Iran also became entangled in sanctions-related complications. Indian refiners accumulated nearly $1.5 billion in unpaid oil payments, reflecting the absence of a workable settlement mechanism.

The broader issue was that India’s energy policy during this period often appeared reactive rather than proactive. In contrast, the current government has systematically built buffers and diversified supply sources to ensure that such vulnerabilities do not recur.

Today, India’s strategic petroleum reserve system is operational. Supplier networks span 40 countries, and refinery configurations are flexible enough to process a wide variety of crude types.

PM Modi’s multi-vector diplomacy

Energy security is not determined only by infrastructure and supply contracts. Diplomacy plays an equally important role.

Prime Minister Narendra Modi’s foreign policy has been marked by what analysts describe as multi-vector diplomacy—maintaining strong relationships simultaneously with countries that may be adversaries to each other.

India has maintained communication with all key regional players including Israel, Iran, Saudi Arabia, the United Arab Emirates, Qatar, Oman, Bahrain and Kuwait.

Prime Minister Modi has spoken with Israeli Prime Minister Benjamin Netanyahu urging de-escalation, while External Affairs Minister S. Jaishankar has remained engaged with Iran’s leadership during the crisis.

India’s diplomatic outreach has also extended across the Gulf, including conversations with UAE President Sheikh Mohamed bin Zayed and Saudi Crown Prince Mohammed bin Salman.

This engagement is vital because nearly nine million Indians live and work in West Asia. Protecting their safety remains a major responsibility of Indian diplomacy.

By maintaining balanced relationships across geopolitical blocs—from Russia to the United States and across West Asia—India has ensured that its energy security is never dependent on a single alliance or supplier.

The way ahead – India’s strategic position

As global energy markets evolve, India’s strategic position has strengthened considerably.

India is projected to be one of the largest drivers of global oil demand growth in the coming years. Refined product demand is expected to reach nearly 5.7 million barrels per day by 2026.

To support this growth, India has expanded refinery capacity and upgraded infrastructure. Indian refineries today rank among the most complex and efficient in the world, enabling the country not only to meet domestic demand but also to export refined petroleum products to global markets.

Energy security is rarely built through dramatic headline-grabbing decisions. It is constructed gradually through careful planning, infrastructure investment, diplomatic engagement and economic foresight.

Over the past decade, India has pursued all these elements simultaneously. Brick by brick, policy by policy and partnership by partnership, the Modi government has strengthened India’s energy security architecture—ensuring that the country can navigate global turbulence with far greater confidence than ever before.