NEW DELHI (Realist English). The closure of the Strait of Hormuz following the start of US-Israeli strikes on Iran on February 28, 2026, became a turning point for India.
The country, which imports nearly 90% of its crude oil, faced supply disruptions from the Persian Gulf for almost four months — a region that had previously supplied about half of its oil imports. According to S&P Global, Indian refineries lost about 20% of their pre-war supplies from West Asia.
Authorities concluded that the previous energy supply model was no longer sustainable. As stated in an Invest India report, “the key takeaway for the government in 2026 is not just that India must strategically reduce import dependence, but that it must manage this dependence much more strategically.”
Scale of the Problem: Strait Closure and Vulnerability
The Strait of Hormuz, through which about a fifth of the world’s oil normally passes, was effectively closed by Iran after joint US-Israeli strikes. For India, this meant a disruption in supplies of critically important energy resources.
According to S&P Global, the closure took 15 million barrels of oil per day out of global circulation. India imports about 88% of its crude oil, 60% of its liquefied petroleum gas (LPG) and roughly half of its natural gas as LNG.
In May 2026, according to the Petroleum Planning & Analysis Cell, the country processed 22 million tonnes of crude oil, of which only 2 million tonnes were produced domestically.
“Although the system held up overall, this episode exposed a deeper vulnerability: India’s dependence on crude oil and the resulting blow to energy security, despite ongoing diversification efforts,” the S&P Global report states.
Supply Diversification: Russia, UAE, Venezuela
In response to the crisis, Indian oil refiners swiftly reworked their logistics. In June 2026, Russia became India’s largest supplier of crude: according to Kpler, in the first half of the month the country imported 2.66 million barrels per day, up from 1.91 million in May.
In second place were the United Arab Emirates with 636,000 barrels per day, just slightly below a record May. Venezuela, which has the world’s largest proven oil reserves, became the fourth-largest supplier with 209,000 barrels per day, behind only Saudi Arabia (384,000).
Analysts call this a “calculated diversification strategy.” Russian oil is attractive due to discounts, while supplies from the UAE help offset the uncertainty surrounding the Strait of Hormuz.
As CNBC notes, Venezuela offers India the opportunity to diversify supplies beyond the Middle East while aligning with Washington’s preferences, which would like India to reduce its dependence on Russian oil.
Strategic Reserves: From Weeks to Months
The crisis also exposed another problem: the inadequacy of strategic reserves. Currently, India has strategic crude oil reserves of about 39 million barrels — enough for just eight days of imports.
The Ministry of Petroleum has already set up a committee to study the feasibility of creating strategic reserves of crude oil, LPG and LNG sufficient to cover a month’s demand. Plans call for expanding underground storage facilities on the eastern and western coasts, which should more than double existing capacity. The ultimate goal is to increase reserves to 120 million barrels.
There are virtually no LPG or LNG reserves in the country. Long-term LPG storage capacity is only 140,000 tonnes — roughly two days of consumption. Authorities have already instructed state-owned oil refiners to increase LPG stocks for emergency needs.
In addition, New Delhi is expanding cooperation with the UAE: an agreement has been reached to store an additional 30 million barrels of oil in the emirates.
The Path to Reducing Dependence
The closure of the Strait of Hormuz demonstrated to New Delhi that reliance on Middle Eastern suppliers carries unacceptable risks. Authorities are focusing on four areas: diversifying importers, expanding reserves, accelerating the transition to renewable energy, and developing domestic production (including a 37,500 crore rupee coal gasification programme).
As S&P Global warns, even if shipping through the Strait of Hormuz resumes, global supply chains could take months to recover. India, however, has already adapted to disruptions through diversification and alternative routes.
The 2026 shock forced India to reconsider the very philosophy of energy security. Previously, the focus was on finding cheap suppliers; now, it is about building a system capable of withstanding any geopolitical storms.