Every few years, a crisis somewhere near the Strait of Hormuz reminds India just how exposed its energy security really is. This year’s disruption, triggered by the US-Israel air war on Iran and the retaliatory blockade of shipping through the strait, has been sharper than most: the Indian crude basket nearly doubled in a single month, jumping from around $69 a barrel in February to $126 in March, and briefly spiking as high as $157. For a country that imports nearly 88 percent of its crude oil, with roughly half of that arriving through Hormuz, this was not an abstract geopolitical event. It showed up directly at the petrol pump and in household budgets.
The government’s response, cutting excise duty by Rs 10 a litre to cushion consumers and leaning harder on Russian crude to plug the supply gap, was sensible crisis management. But crisis management is not the same as strategic preparedness, and it is worth asking why India keeps finding itself reacting rather than anticipating when a chokepoint that carries a quarter of the world’s seaborne oil trade comes under strain yet again.
Nearly 70 percent of the oil moving through Hormuz flows to China, India, Japan and South Korea, which means Asia’s largest economies are collectively hostage to a strip of water that a single regional conflict can choke off. India has strategic petroleum reserves, but they are sized for a matter of weeks, not months, of sustained disruption. Diversifying crude sourcing further, accelerating the shift to renewables and electric mobility, and building deeper reserve capacity are not new ideas, but each Hormuz scare makes the case for urgency more plainly than the last.
There is also a domestic political dimension worth confronting honestly. Fuel-tax cuts are a popular and immediate salve, but they also eat into government revenue at a time when that money could fund the very energy-transition investments that would reduce dependence on the strait in the first place. The next disruption, whenever it comes, will not wait for India’s planning cycles to catch up. The choice policymakers face now is whether to treat this year’s price shock as a one-off inconvenience to be managed, or as the clearest signal yet that energy security needs to move from contingency planning to core strategy.
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