India maintains a robust stance on its energy security despite escalating tensions in West Asia. Union Petroleum and Natural Gas Minister Hardeep Singh Puri convened a crucial review meeting on 2 March 2026 with senior officials from the Ministry and public sector undertakings to assess supplies of crude oil, LPG, and other petroleum products.

The Petroleum Ministry affirmed that it is vigilantly monitoring the unfolding situation. All requisite measures are being implemented to guarantee the availability and affordability of essential petroleum products across the nation.

As a major importer of crude oil and natural gas predominantly from West Asian nations, India faces inherent vulnerabilities. Yet, officials emphasise that current stockpiles and diversified sourcing mitigate immediate risks.

Crude oil prices have surged past $75 per barrel amid the conflict, primarily involving Iran, with over a 7% rally in a single day. This escalation stems from fears over disruptions in the Strait of Hormuz, a vital chokepoint for nearly half of India's oil imports.

The Strait of Hormuz remains a focal concern, handling roughly 50% of India's crude and LNG inflows. Any blockade could necessitate rerouting via the Cape of Good Hope, inflating freight costs, transit times, and insurance premiums.

India's strategic petroleum reserves provide a buffer, sufficient for at least 10 days of crude needs, complemented by another 5-7 days of refined fuel stocks. This cushion averts short-term shortages even if the Strait faces temporary closure.

The Department of Commerce, under the Ministry of Commerce and Industry, conducted a stakeholder consultation. It involved key ministries, logistics partners, and trade facilitators to evaluate impacts on India's export-import cargo flows.

Prime Minister Narendra Modi chaired a Cabinet Committee on Security meeting on the night of 2 March 2026. Discussions centred on securing sea lanes, contingency crude sourcing, strategic reserves, and the welfare of approximately nine million Indians in West Asia.

Alternative sourcing options include ramping up purchases from Russia via eastern routes, the United States, West Africa, and Latin America. While these entail higher freight expenses, they ensure supply continuity.

OPEC+ has paused output hikes for the first quarter of 2026 but plans a modest 0.2 million barrels per day increase from April. Spare capacity beyond Saudi Arabia and the UAE remains constrained, limiting rapid responses to shortages.

Economists caution that prolonged disruptions could elevate crude prices beyond $70 per barrel for the year, straining India's import bill given its 85% oil and 50% LNG import dependency. Corporate sectors face heightened pricing and procurement risks.

The government's proactive monitoring and diversified procurement strategy underscore India's resilience. No immediate disruptions are anticipated, with affordability prioritised through vigilant oversight.

ANI