The energy security of India is threatened due to the conflict going on between the US, Israel, and Iran in West Asia. Iran has closed the Strait of Hormuz, which is home to one-fifth of the world’s oil exports. This has increased oil prices, and the development may affect the Indian economy seriously. However, Russia has announced that it would support India.
According to Reuters, quoting a Russian source, Russia is prepared to help India if energy supplies are disrupted. This comes as India has called for safeguarding the rights of some 10 million Indian nationals in the region and said that any reduction in energy supplies would affect the economy.
The Ministry of External Affairs issued a statement saying, “Our trade and energy supply chains also pass through this geography. Any major disruption could have serious consequences for the Indian economy.”
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India receives approximately 50% of its total crude oil imports and 54% of its natural gas through the Strait of Hormuz. LNG from Qatar and the UAE also comes through this route.
The conflict continues for the fourth day. The US and Israel launched joint attacks on Iran, killing Iran’s Supreme Leader, Ayatollah Ali Khamenei. In response, Iran attacked US military bases and other targets in Gulf countries. Iran has blocked the Strait of Hormuz, halting the movement of oil tankers.
Meanwhile, Qatar, India’s largest LNG supplier, has halted production. Qatar declared force majeure following the Iranian drone attack, resulting in a 40 percent reduction in LNG supplies to India.
According to PTI, Qatar supplies approximately 27 million tons of LNG to India annually, 40 percent of which has been affected. Petronet LNG Limited has informed gas marketers that Qatar’s production has stopped. Petronet has a long-term contract with Qatar for 8.5 million tons per year. Industries are facing gas shortages, which could impact production. The government is exploring alternative sources.
Strengthening energy cooperation with Russia could provide relief to India, as Russia is already India’s major oil supplier. Experts believe that if the conflict continues, oil prices could reach $200 per barrel, leading to higher prices for petrol and diesel and inflation.
The government is monitoring the situation and keeping all options open to ensure energy security. India has appealed to take necessary steps for the safe evacuation and protection of Indian citizens in the region. Given the gravity of the situation, the central government is vigilant and is working on plans to strengthen alternative supply chains.
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