India must develop a diversified energy strategy with multiple supply routes, broaden its sources of crude oil and natural gas, and enhance storage and port facilities, as rising security tensions in West Asia reveal weaknesses in the country’s energy supply chains, according to experts.
The latest escalation in West Asia between Saudi Arabia and Yemen’s Houthi rebels has underscored the dangers for India of depending on a narrow set of routes and facilities for its energy imports.
This development coincides with the prolonged effective closure of the Strait of Hormuz, which for months has significantly disrupted one of the world’s main channels for energy transportation.
The situation is critical for India, as its strong reliance on imported oil and gas exposes the economy to risks from global supply disruptions and volatile energy prices.
In 2024–25, India relied on imports for roughly 42 per cent of its total primary energy needs, though the level of import dependence differed significantly by fuel type.
Official figures indicate that about 89 per cent of crude oil consumption was met through imports, along with around 49 per cent of natural gas and approximately 18 per cent of coal.
Experts noted that for India, the task is not only to identify new suppliers, but also to develop multiple routes and logistical arrangements that can maintain the flow of supplies during a regional crisis.
However, they also stressed that these alternatives cannot fully substitute Gulf supplies in the short term, due to higher costs, longer shipping durations, and compatibility challenges with India’s current refining and energy infrastructure.
he Strait of Hormuz, connecting the Persian Gulf to the Gulf of Oman, serves as a critical corridor that transports about one-fifth of the world’s energy supplies in times of peace.
Since February, disruptions stemming from the Iran-Israel-US conflict have sharply reduced commercial shipping and destabilized energy supplies.
The ensuing escalation in the Red Sea and Bab el-Mandeb region has further heightened risks to energy and shipping corridors linking the Gulf to global markets.
India imported approximately 1.8 billion barrels of crude oil in 2025, with 48 per cent sourced from the Gulf region, according to Rajeev Agarwal, a senior research consultant at the New Delhi-based Chintan Research Foundation.
Agarwal told PTI that, in the future, India will need to adopt a multi-pronged approach to protect its energy security. He noted that the country has already broadened its crude oil imports to more than 40 nations, with Russia, the United States, Nigeria, and Venezuela becoming key suppliers.
Cauvery Ganapathy, a climate and energy fellow at the Dubai-based Observer Research Foundation Middle East (ORF ME), said India could in the short term reroute Gulf-origin crude through the Mediterranean Sea or tap cargoes already at sea through spot trading, swaps and other forms of international arbitrage.
She noted, however, that it is important to recognise the constraints of this strategy, both in terms of the limited volumes available and the intense competition for them.
Ganapathy endorsed the idea of diversifying India’s crude oil imports across various markets, but warned that reducing dependence on Gulf supplies could prove more expensive.
“Re-routing and sourcing from alternative countries bring their own challenges, including higher risk premiums and longer shipping times, which are likely to directly affect affordability,” she said in an email to PTI.
Mannat Jaspal, climate and energy director at ORF ME, said India must broaden its strategic buffers by increasing its Strategic Petroleum Reserves (SPR) and commercial stockpiles.
SPRs are government-managed crude oil reserves maintained for use during emergencies when normal supply chains are interrupted.
In May, India and the UAE signed a strategic collaboration agreement under which Abu Dhabi National Oil Company could increase its crude oil storage in India's strategic petroleum reserves to up to 30 million barrels.
The agreement also includes exploring crude storage in Fujairah, as part of India's strategic petroleum reserve, as well as potential LNG and LPG storage facilities in India.
“The announcement that the UAE will be increasing its crude oil storage capacity in India by almost six times the current volume is a case in point,” Jaspal told PTI.
Ganapathy said expanding SPR capacity should be a priority for India, the world's third-largest oil importer, but warned that storage infrastructure must also be designed to handle different varieties of crude.
“The industrial composition that India has already built is structurally tied to the form of medium or heavy sour grade Gulf crudes (oil containing relatively high levels of sulphur),” Ganapathy said.
She pointed to Reliance Industries' Jamnagar refinery as an example of how complex refining facilities can process a wider range of crude. Greater refining flexibility, however, requires significant investment.
The experts noted that the latest events in West Asia highlight the importance of India treating energy security as an integrated framework that includes diversified supply sources, strategic reserves, adaptable refining capacity, alternative ports, and safeguarded maritime routes.
“India’s capacity to engage individually with every stakeholder in the region is essential for ensuring that any of these diversification pathways can effectively serve our interests,” Ganapathy said.