Examine how prolonged conflict in West Asia affects India's energy import diversification strategy.

Q. Examine how prolonged conflict in West Asia affects India's energy import diversification strategy. (15 marks, 250-350 words)

India imports close to 88.5% of its crude oil [1], much of it through the Strait of Hormuz. With the strait under Iranian de facto control since the 2026 war, and a bilateral Iran-Oman transit route only now taking shape [2], prolonged West Asian conflict has turned diversification from a policy preference into a survival strategy — yet also exposed its limits.

Conflict as a supply-side shock - Hormuz normally carries about one-fifth of global oil and LNG; its disruption directly hits Iraq, Saudi Arabia and the UAE — India's largest traditional suppliers [2]. - War-risk insurance, longer voyages and freight premiums raise the landed cost of every barrel, widening the current account deficit and feeding imported inflation. - Qatari LNG, also Hormuz-routed, makes gas-based diversification vulnerable to the same chokepoint.

Acceleration of diversification - India's crude basket has widened from around 27 supplier countries in 2006-07 to roughly forty today, with rising volumes from Russia, the United States, West Africa and Latin America [3]. - Prolonged conflict speeds this rebalancing by making Gulf dependence a visible strategic risk rather than a commercial convenience.

Structural constraints - Indian refineries are configured for Gulf sour grades; switching to lighter Atlantic-basin crude imposes technical and cost penalties. - Replacement barrels carry their own risks — sanctions exposure on Russian crude, and longer, costlier sea routes. - India's Chabahar Port investment in Iran lies within the same conflict theatre [4], limiting geographic hedging.

Policy cushions - Strategic Petroleum Reserves of 5.33 MMT at Visakhapatnam, Mangaluru and Padur, with 6.5 MMT more approved under Phase-II at Chandikhol and Padur [5]. - Demand substitution through ethanol blending, natural gas, biofuels and electric mobility reduces the import base itself [6].

Diversification of sources alone cannot neutralise a route vulnerability. India's durable answer lies in combining a wider supplier portfolio with deeper strategic reserves, alternative maritime corridors, and steady demand substitution — aligning energy security with SDG-7 and the goal of an Aatmanirbhar energy economy.

(~320 words)

Sources: 1. India's Petroleum Industry — PIB — India's ~88.5% crude import dependency 2. New Hormuz route agreed, to be managed jointly with Oman: Iran — The Hindu (AFP, Tehran), 6 August 2026 — Iran-Oman route agreement; Hormuz share of global oil/LNG flows 3. Import/Export of Crude Oil and Petroleum Products — PPAC, Ministry of Petroleum & Natural Gas — widening of India's crude supplier base 4. India takes over operations of part of Chabahar Port in Iran — PIB — India's Chabahar stake in the conflict theatre 5. Government steps to Strengthen Strategic Petroleum Reserves — PIB — SPR capacity of 5.33 MMT and Phase-II 6.5 MMT 6. Steps by Government to Reduce Import Dependency on Crude Oil — PIB — demand substitution via ethanol, gas, EVs