The war in West Asia has moved beyond the battlefield. It is now an energy security shock, a shipping risk, and a macroeconomic test for import-dependent economies. For India, the immediate concern is not ideology. It is oil, LPG, fertilisers, inflation, the rupee, and supply continuity.
The Strait of Hormuz is the centre of the risk. In 2024 and the first quarter of 2025, flows through Hormuz accounted for more than one-quarter of global seaborne oil trade and about one-fifth of global oil and petroleum product consumption. Around one-fifth of global LNG trade also moved through the strait, much of it from Qatar. That makes Hormuz less a regional waterway than a global economic valve.
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Strait of Hormuz and India’s LPG risk
India’s vulnerability is clearest in LPG. The petroleum ministry said in March 2026 that India imports about 60% of its LPG consumption, and about 90% of those imports come through the Strait of Hormuz. The government also said 70% of India’s crude imports were then being routed outside Hormuz, which shows both the flexibility in crude sourcing and the narrower room for manoeuvre in LPG.
This distinction matters. Crude oil can be partly replaced through Russia, Africa, Latin America, and the United States. LPG is harder. Any disruption in LPG supply quickly reaches households, restaurants, small businesses, and industry. Recent supply management measures, including limits on LPG access for some piped natural gas users, underline the pressure on domestic allocation.
Asia faces the larger exposure. Reuters reported that Asia imported 14.74 million barrels per day of Middle Eastern crude in 2025, nearly 60% of its total crude purchases. India’s Middle East share has varied with Russian supplies and refinery economics, but geography has not changed. Gulf energy remains central to Asian growth.
Oil shock and macroeconomic pressure
India’s problem is not only physical supply. It is price. A sustained oil shock feeds into the current account deficit, the fiscal cost of fuel management, airline and freight costs, fertiliser subsidies, and household inflation. The rupee also comes under pressure when crude prices rise and the dollar strengthens. Recent market reports have already linked rupee weakness to higher oil prices and West Asia tensions.
The United States may be the world’s largest oil producer, but that does not remove the Middle East from the energy equation. Global crude prices are set at the margin. A disruption in Gulf exports affects the landed cost for Asian refiners even when cargoes are sourced elsewhere. Diversification reduces dependence. It does not eliminate price transmission.
India has tried to adjust. Refiners have increased purchases from Latin America and Africa after disruptions in Middle East supplies. Russia has remained an important supplier. UAE and Saudi supplies have also been aided by pipeline routes that partly bypass Hormuz. These are useful buffers, but they are not a substitute for stable Gulf shipping.
Energy transition still needs hydrocarbons
The crisis also exposes a common misunderstanding about the energy transition. Renewable energy, electric vehicles, solar panels, and low-carbon technologies reduce future dependence on fossil fuels. They do not remove hydrocarbons from the present economy.
The International Energy Agency has noted that petrochemicals are set to account for more than a third of the growth in oil demand to 2030 and nearly half of the growth to 2050. Plastics, synthetic fibres, packaging, industrial materials, and components used across modern supply chains still depend on petrochemical feedstocks.
This is why an oil shock is not confined to petrol pumps. It travels through plastics, fertilisers, transport, textiles, construction, and consumer goods. A country can expand solar capacity and still remain exposed to oil and gas price shocks for many years.
Fertilisers, food and rural India
Natural gas is also central to nitrogen fertiliser production. Higher gas prices raise the cost of fertilisers, either for farmers or for the government through subsidies. India’s agriculture sector is too large for this to be treated as a narrow input-cost issue. The agriculture ministry’s annual report says agriculture and allied sectors accounted for 18.4% of India’s GVA in 2022-23 and that 54.6% of the workforce was engaged in agriculture and allied activities, based on Census 2011.
The linkage is direct. A gas shock can become a fertiliser shock. A fertiliser shock can become a food inflation problem. Food inflation then becomes a monetary policy, welfare, and political problem. This is the channel through which a war far from India’s borders can affect rural incomes and urban household budgets.
Chabahar and strategic exposure
Iran is not only an energy-risk variable for India. It is also a strategic geography. On May 13, 2024, India Ports Global Ltd signed a 10-year contract with Iran’s Ports and Maritime Organisation to equip and operate the Shahid Beheshti Terminal at Chabahar Port. The project gives India access to Afghanistan and Central Asia while bypassing Pakistan.
This makes the conflict harder for New Delhi. India must protect energy security, preserve strategic access, manage relations with the United States and Israel, and avoid being drawn into a wider regional contest. A simple alignment is not available. The prudent course is risk management, not rhetoric.
India’s response should therefore rest on four priorities. First, deepen crude and LPG sourcing diversification. Second, expand strategic reserves and commercial storage. Third, strengthen fertiliser and gas contingency planning. Fourth, accelerate renewables without pretending that oil and gas exposure has disappeared.
The West Asia crisis is a reminder that energy security is not an old-economy concern. It is the foundation on which growth, price stability, food security, and industrial competitiveness rest. India’s transition to cleaner energy is necessary. Its preparation for hydrocarbon shocks is equally necessary.
Ashraf Rehman is a fellow at The Green Institute and a Columnist from North East, India.