- India’s energy security risks rising if US-Iran conflict escalates in the Middle East
- Strait of Hormuz tensions threaten oil, gas imports and Indian seafarers' safety
- India depends heavily on Gulf nations for LPG, making supply vulnerable to conflict
US-Iran War: India's energy security could once again come under pressure if the conflict in the Middle East intensifies further.
As tensions around the Strait of Hormuz deepen following fresh attacks by the US and Iran, leading energy economist Kirit S Parekh has warned that a prolonged conflict could significantly raise India's oil and gas import bill, disrupt fuel supplies and pose fresh risks for Indian seafarers operating in one of the world's busiest shipping lanes.
Speaking to NDTV, Parekh said any further escalation in the Middle East would directly increase India's spending on imported crude oil and natural gas. "If the war in the Middle East further escalates, it will increase the cost of oil and gas for India," he said.
His warning comes amid renewed uncertainty over shipping through the Strait of Hormuz -- a narrow maritime passage that handles a substantial share of global crude oil and LNG trade. While India has diversified its crude sourcing over the past few years, the country continues to depend heavily on Gulf nations for LPG imports, making the route strategically important.
At time of filing this report, Brent Oil Futures price was moving closer to the US$ 80 per barrel level following an increase in uncertainty in the Middle East. It jumped more than 3 per cent during trading on Monday.
Parekh also cautioned that Iran's attacks on several Gulf countries could have implications beyond shipping. "Iran has bombed many Gulf countries after the US attacks. This can have far-reaching ramifications on the production of oil and gas too," he told NDTV.
Safe Passage For Tankers
The veteran economist urged India to intensify diplomatic engagement with both Tehran and Washington to safeguard its energy lifeline.
According to Parekh, New Delhi should proactively work with Iran and the US to ensure safe passage for crude oil and LNG tankers bound for Indian ports. He also expressed concern over the recent attack on a cargo vessel carrying 11 Indian nationals.
"The attack on a ship with 11 Indians on board is deeply disturbing. India must ensure that it doesn't happen again. Safety of Indian seafarers must be ensured at any cost," Parekh said. He noted that thousands of Indian sailors work across the Gulf shipping network.
LPG Industry Braces For Uncertainty
While crude oil supplies appear relatively better insulated because India now imports oil from a wider range of countries, industries dependent on LPG remain vulnerable if disruptions worsen. Experts have pointed out that a significant portion of India's LPG imports traditionally moves through the Strait of Hormuz, making the fuel more susceptible to supply shocks than crude oil.
That concern is echoed by Suraj Mehta, Chief Strategy Officer at Hindusthan National Glass & Industries Ltd (HNGIL). "The distinction between crude and LPG is one that user industries feel very directly," Mehta said.
"Refiners have alternatives and can rework their sourcing, but for a continuous process industry like glass manufacturing, a shortfall in LPG allocation is immediate."
According to Mehta, the government's decision this month to withdraw sectoral restrictions on non-domestic LPG had helped restore industrial supplies to pre-crisis levels. "The renewed escalation naturally brings back some uncertainty," he said.
However, he added that the industry is better prepared this time. "We are watching rather than reacting. Our fuel buffer is wider than it was, our energy mix is more diversified, and we are in close touch with the Ministry of Petroleum on supply."
Mehta said the long-term solution lies in expanding access to piped natural gas for industries. "The durable answer remains faster piped natural gas access for industry, which is what would insulate manufacturing from this cycle repeating."
Why India Is Watching Hormuz Closely
The Strait of Hormuz remains one of the world's most critical energy chokepoints. Any disruption affects not only shipping costs and insurance premiums but also the timely movement of oil, LNG and LPG cargoes.
Although India's crude oil procurement has become increasingly diversified in recent years, reducing dependence on the Gulf route, LPG remains far more exposed because imports are still concentrated in the Middle East. This makes prolonged disruption a bigger concern for industries and commercial users than for petrol and diesel supplies.
