Despite the 14-point memorandum of understanding signed between the US and Iran on June 18 to end conflict, carriers have preferred to use land routes from ports east of the Strait of Hormuz, demonstrating the resilience of India's energy diversification strategy. As reported by Business Standard, a senior government official confirmed that "We are well-stocked currently and have tied up energy supplies for the short term. We are not dependent on the Strait of Hormuz for supplies of crude oil, liquefied natural gas (LNG), and liquefied petroleum gas (LPG)." The situation remains under monitoring and review, with total crossings through the Strait of Hormuz rising to 17 on July 13 from 11 the previous day, though traffic remains well below normal levels. Industry experts note that "Shipping lines had started calling at ports east of the Strait of Hormuz, such as Salalah, Khorfakkan, Sohar, and Jeddah, when the crisis began" and carriers don't change operating patterns quickly, explaining why there was no immediate return to the strait after the ceasefire was announced.
India's resilience during the recent West Asia crisis was achieved through ₹74,781 crore fiscal absorption by public-sector Oil Marketing Companies, demonstrating the true cost of energy security. As reported by The Hindu OpED, this resilience was the outcome of a decade of supplier diversification, sustained diplomatic engagement with Iran and Gulf producers, strategic reserve-building, and whole-of-government coordination. The crisis validates India's energy security architecture while leaving open the question of how long consumer price insulation can be sustained through OMC losses if shocks recur or persist. This fiscal burden highlights the ongoing challenge of balancing energy security with economic costs.
India has successfully diversified its energy sourcing, with Russia now accounting for 40% of India's crude oil imports and the US emerging as the biggest supplier of LPG and LNG since the West Asia crisis. According to Yes Securities lead analyst Hitesh Jain, "India has already diversified its sourcing, with around 40% of crude oil supplies coming from Russia. Supplies from the US have increased, and Venezuela has also entered the picture. Not only crude oil, but LNG and LPG supplies have also been diversified. Gulf nations such as Saudi Arabia and the United Arab Emirates are also exporting through alternative routes." This diversification strategy has proven effective in reducing dependence on the Strait of Hormuz, with Indian refiners securing major volumes from routes that bypass the critical chokepoint.
Much of India's crude oil imports travel through finite maritime chokepoints, with the foremost being the Strait of Hormuz, through which approximately one-fifth of globally traded oil passes and around half of India's own imports flow. As reported by Business Standard, oil prices respond not only to actual disruption but also to expectations of disruption, placing import-dependent economies at the mercy of risks they did not create. Recent tensions in West Asia have demonstrated how even successful diplomatic relations cannot guarantee reliable energy supplies from regions shaped by rivalries beyond India's control. The current crisis has validated the importance of alternative supply routes and diversified sourcing strategies.
Over the past decade, India has implemented several measures to reduce energy import vulnerability, including diversifying crude oil sources to 40 countries and establishing strategic petroleum reserves covering 9.5 days of demand with total national coverage of 74 days. As reported by Business Standard, India has also expanded its maritime security capabilities to protect energy flows and strengthened its naval deployments across the Indian Ocean. However, these measures all share the limitation of buying time rather than achieving energy freedom, as strategic reserves are finite and diversification reduces dependence on suppliers but not on imports themselves. The current crisis has validated India's energy security architecture while emphasizing the need for long-term solutions beyond diplomatic efforts.
