Amid escalating tensions in West Asia and fears of a potential blockade of the Strait of Hormuz, India has significantly ramped up its crude oil imports from the United States and activated contingency plans to bypass the volatile maritime chokepoint. The move is part of a broader strategy to diversify energy sources and shield the economy from global oil shocks.
Strategic Shift in Oil Sourcing
According to government sources, Indian state-run refiners—IOC, BPCL, and HPCL—are in advanced talks with Adnoc and Saudi Aramco to utilize overland pipelines that circumvent the Strait:
- Habshan–Fujairah Pipeline (UAE): 360 km, 1.5 million barrels/day capacity
- East–West Petroline (Saudi Arabia): 1,200 km, 5 million barrels/day capacity
These routes would allow crude to reach the Gulf of Oman and Red Sea, bypassing the Strait of Hormuz, which handles nearly 20% of global oil shipments and is vulnerable to geopolitical flare-ups.
Surge in U.S. Crude Imports
India imported 3.7 million metric tonnes (MMT) of U.S. crude in April–June 2025, up from 2.7 MMT a year ago, and is on track to cross 4 MMT by quarter-end. This surge reflects a deliberate pivot toward non-Gulf suppliers amid fears of supply disruption due to the Israel–Iran conflict.
Why Hormuz Matters
At just 21 miles wide, the Strait of Hormuz is a critical artery for oil and LNG exports from Saudi Arabia, Iran, Iraq, Kuwait, UAE, and Qatar. India sources over 60% of its crude from the Gulf, with 2 million barrels/day transiting through Hormuz. A prolonged disruption could spike oil prices, widen the trade deficit, and fuel inflation.
Energy Diplomacy and Resilience
India’s energy ties with the U.S., Russia, and Latin America have deepened since the Russia–Ukraine war. The Centre is also leveraging strategic reserves and long-term contracts to buffer against volatility. Adnoc remains the only foreign contributor to India’s strategic reserves, while Saudi Aramco is eyeing joint refinery projects under a $100 billion investment plan.
Outlook
While the U.S.-brokered ceasefire between Iran and Israel has temporarily calmed markets, India’s proactive diversification and infrastructure planning underscore its commitment to energy security and economic stability.
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