From Hormuz to the household: Why India needs a new energy security doctrine

A missile strike in the Strait of Hormuz may seem distant until it shows up in the price you pay at the petrol pump. For India, this is not a hypothetical scenario but a recurring economic reality. In an increasingly interconnected world, geopolitical disruptions travel quickly through energy markets, landing squarely in household budgets.

The shock of Russia’s invasion of Ukraine in 2022 is a case in point. As global crude prices surged, India’s import bill ballooned, driving inflation across sectors. For a country that imports nearly 85% of its crude oil, exposure to such external shocks is not incidental; it is structural. What appears to be a distant conflict can, within weeks, reshape domestic economic conditions from metropolitan centres to small towns. Energy security is no longer just an economic concern; it is a national strategic imperative. India must move beyond reactive measures to a coherent energy security doctrine that anticipates and absorbs global shocks.

The anatomy of exposure

India’s energy map is, in many ways, a map of geopolitical risk. Nearly a fifth of global oil trade passes through the Strait of Hormuz, and a significant share of India’s crude imports traverses this narrow corridor. Any escalation involving regional powers, particularly Iran, has immediate implications not only for physical supply but also for global price benchmarks through heightened risk premiums.

A similar fragility defines the Red Sea corridor. Since late 2023, attacks on commercial shipping have forced vessels to reroute around the Cape of Good Hope, increasing transit times, freight charges, and insurance costs. These ripple through supply chains, functioning as an “invisible tax” on importing economies like India. Disruptions thousands of kilometres away translate into higher landed costs of crude, which then filter through the domestic economy.

Oil shocks are transmitted rapidly and widely. A spike in crude prices raises transportation and logistics costs, pushing up prices across sectors — from manufacturing inputs to agricultural produce. Fertiliser costs rise, food prices follow, and inflation becomes embedded at the household level. The macroeconomic consequences are equally significant: a higher import bill widens the current account deficit, pressures the rupee, and increases the cost of dollar-denominated imports, compounding the initial shock.

Even modest price changes carry substantial weight. A $10 per barrel rise can add an estimated $14-15 billion to India’s annual import bill. For policymakers, this means tighter fiscal space and heavier subsidy burdens; for MSMEs, compressed margins and reduced competitiveness. India has managed past disruptions through calibrated taxation and opportunistic sourcing, but in a world of frequent and overlapping geopolitical crises, such measures amount to cushioning, not resilience.

Strengths Without a System

India has taken meaningful steps to reduce its vulnerability. Following the Ukraine conflict, it increased imports of discounted Russian crude, at one point accounting for over a third of total imports. Supplier diversification has expanded to include the United States, Brazil, Guyana, and parts of West Africa. Domestically, ethanol blending in petrol has crossed 12 per cent, and renewable energy capacity has surpassed 200 GW, with solar playing a leading role.

Yet these gains remain fragmented. India’s Strategic Petroleum Reserves (SPR) cover only about 9-10 days of demand — modest compared to the United States’ roughly 60 days or China’s approximately 70-80 days. In a prolonged disruption, such as a sustained Hormuz blockade, these buffers would offer limited protection. The challenge is not the absence of policy action but the lack of integration. India’s energy strategy must evolve from a set of discrete initiatives into a unified, doctrine-driven framework.

Towards a doctrine

India’s next phase of energy security must rest on four strategic pillars.First, diversify supply at scale — extending long-term partnerships beyond the Gulf to the Americas, Africa, and Central Asia, while institutionalising energy diplomacy.

Second, expand strategic reserves urgently, targeting at least 15-20 days of cover in the near term, supported by public-private participation and clear drawdown protocols.

Third, secure maritime energy routes - from Hormuz to the Strait of Malacca — through enhanced naval capabilities and closer coordination with strategic partners. Fourth, accelerate the clean energy transition: expanding renewables, scaling green hydrogen, and promoting electric mobility are not merely climate goals but strategic hedges against oil dependency. Together, these measures shift India’s posture from managing shocks to pre-empting them.

Every global conflict today carries an economic cost for India — not always visible in headlines but felt acutely in household budgets. Energy costs — from petrol to cooking gas — have become a real-time indicator of geopolitical instability. India has both the capacity and the opportunity to change this equation. By embedding energy security at the core of national strategy, it can transform a structural vulnerability into strategic resilience. The next oil shock is not a question of if, but when. Preparedness must be built accordingly.

Megha Jain- Assistant Professor at Shyam Lal College, University of Delhi and Senior Visiting Fellow, Pahle India Foundation and Surabhi Singh - Research Associate, Pahle India Foundation ; views are personal