Fuel Supplies Stay Stable Amid Strait Of Hormuz Crisis – What’s Behind India’s Energy Resilience?

The Strait of Hormuz crisis, triggered by escalating Iran–US tensions since late February, has disrupted one of the world’s most critical energy corridors. For India, which imports over 80% of its crude oil and 60% of its LPG, the blockade posed a serious challenge. Yet, through swift diversification and policy action, India has managed to stabilize supplies.

Diversification Of Crude Imports

India rapidly increased purchases of Russian oil and alternative suppliers to offset Gulf disruptions. Refinery run rates remained robust, ensuring uninterrupted domestic fuel production. This flexibility in sourcing crude has been central to maintaining supply security. 

LPG Supply Management

LPG was the hardest hit, with imports halving in March and April. However, India secured rare breakthroughs: tankers like Sarv Shakti and Green Asha successfully crossed Hormuz, delivering over 45,000 tonnes of LPG. Ports prioritized LPG carriers, while domestic production was ramped up to meet demand. 

Government Interventions

The Ministry of Petroleum assured citizens of stable supplies, urging against panic buying. Measures included:

• Cutting excise duty on petrol and diesel to absorb price shocks
• Enhancing refinery output and crude inventories
• Deploying alternate fuels like kerosene and coal
• Strict enforcement against hoarding, with over 3,000 raids in a single day 

Broader Market Context

Global crude prices surged past $110 per barrel, with projections of $130–170 if disruptions persist. LNG spot prices also spiked, raising inflationary risks. Analysts warn that prolonged instability could push India to accelerate its clean energy transition. 

Key Highlights

• Strait of Hormuz closure disrupted 40% of India’s crude and 90% of LPG imports
• India diversified crude sourcing, especially Russian oil
• Rare LPG tanker crossings ensured supply continuity
• Government cut fuel excise duties and boosted refinery output
• Domestic LPG distribution remained stable despite import halving
• Global oil prices surged past $110 per barrel amid crisis

Sources: The Indian Express, Moneycontrol, The Hindu BusinessLine, Mathrubhumi, Hindustan Times, Open Magazine, Indian PSU, FAO