New Delhi Moves to Resume Oil Tanker Transits despite Iran Conflict Risks

With India importing nearly 85 percent of its crude oil requirements and a significant portion sourced from Middle Eastern producers, the prolonged disruption of the Strait of Hormuz has become one of the most pressing strategic challenges for New Delhi since the conflict erupted in February. In a development closely tracked by energy markets, India is now preparing to send oil tankers back through the critical waterway despite the continuing risks posed by the regional conflict.

According to sources familiar with the matter, plans are being finalised for Indian-linked vessels to resume loading operations through the Hormuz corridor — a narrow, 33-kilometre-wide passage between Iran and Oman through which roughly 17-20 million barrels of oil flow daily, representing about 20 percent of global petroleum trade and 30 percent of all seaborne oil.    The move comes as India balances a delicate act: securing crude supplies from its largest regional suppliers, including the UAE, Saudi Arabia, Iraq, and Kuwait, while managing the escalating security risks in the Gulf. Several tankers — primarily from other Asian markets — have already managed to make transits through the waterway in recent weeks, offering a tentative signal that movement through Hormuz is possible even if conditions remain difficult.     Indian authorities are reported to have held diplomatic-level discussions with Iranian officials to facilitate movement of Indian-flagged tankers through the strait. These talks are part of a broader effort to protect India’s energy supply chain, which feeds approximately 100 million barrels of monthly refining capacity across state-run and private refiners including Indian Oil Corporation, Hindustan Petroleum, Bharat Petroleum, and Reliance Industries.

Energy analysts note that while India has successfully diversified a portion of its oil imports toward Russia — which became one of India’s largest crude suppliers following the Ukraine conflict-linked sanctions that began in 2022 — Russian oil arrives via longer trade routes and does not easily substitute for the Gulf grades that feed specific refinery configurations in India.

The Strait of Hormuz remains the most critical chokepoint in India’s energy supply chain, and any sustained blockage raises immediate risks of fuel price inflation, refinery throughput disruptions, and a potential balance-of-payments strain given India’s heavy import dependence. Insurance premiums for tankers transiting the Strait have reportedly surged to multi-year highs, adding substantially to landed crude costs.   Industry observers expect that a gradual reopening of Hormuz tanker traffic — possibly facilitated by the ongoing US-Iran diplomatic talks — could bring relief to Asian buyers, including Japan and South Korea, who are similarly exposed to Middle Eastern supply chains.   For India, the stakes are particularly high. The country’s strategic petroleum reserve (SPR) capacity offers only limited buffer, underscoring the urgency of restoring normal flows through one of the world’s most indispensable maritime corridors.