Manish Tewari | Why Hormuz crisis must lead to a strategic reset

The escalating conflict in West Asia and the effective disruption of the Strait of Hormuz have once again exposed a hard truth: India’s energy security remains deeply vulnerable to geopolitical shocks far beyond its borders. As India aspires to be a $5 trillion economy and a global manufacturing hub, the fragility of its energy lifelines is a strategic concern that must no longer be treated as episodic, but structural.

A major chunk of India’s crude oil imports transit through the Strait of Hormuz, a narrow maritime corridor that handles roughly one-fifth of global oil trade. The heightened tensions have led to a sharp surge in insurance premiums for ships passing through. Tanker operators are either charging higher freight rates or avoiding the route altogether. Even the presence of US warships offers limited reassurance. Iran can easily disrupt shipping in Hormuz, using asymmetric tactics, making it one of the most vulnerable choke points in global trade.

Choke Points and Fragile Lifelines

This crisis underlines a larger issue: International energy trade is inherently fragile because it is concentrated through a few critical maritime choke points. There are six such global arteries west to the east, namely, the Suez Canal and Bab el-Mandeb Strait; Strait of Hormuz; Strait of Malacca, Sunda Strait and the deeper Lombok Strait used by the Very Large and Ultra Large crude Carriers with Dead Weight Tonnage ranging from 200,000-3,20,000.

From a geographic perspective, energy flows largely from west to east. For India, this means that while disruptions in the Suez Canal or Bab el-Mandeb do have a deleterious impact on energy security, and blockages in the Strait of Malacca or the Sunda and Lombok Strait hurt East Asian economies, the Strait of Hormuz remains the existential gateway through which India’s energy lifeline flows.

The effect of an energy disruption at any single choke point can have ripple effects throughout the supply chain for Indian consumers in the form of price spikes, delay in redirecting freight, shortages in shipping services to elucidate but a few. Due to interconnectedness of global energy markets, even a disruption not actually a blockade of the delivery of goods into India can still elevate prices and render the domestic energy market unstable. Energy sovereignty, therefore, cannot be achieved merely by securing supply lines; it requires reducing dependence on vulnerable external systems altogether.

Rising Dependence

India’s energy dependence has, in fact, worsened over time. In 2013-14, India imported roughly 77 per cent of its crude oil requirements. By 2025, this figure has climbed to over 85 per cent. Liquified Natural gas imports during the same period have shot up from 30 to 47 per cent respectively. Notwithstanding the attempted diversification of suppliers i.e. buying discounted oil from Russia between April 2022 and November 2025, as also non-discounted oil from the US, and Latin America — the fundamental vulnerability remains unchanged: The country is still heavily import-dependent.

In a world where supply shocks are becoming more frequent and unpredictable, expanding strategic petroleum reserves, promoting renewables and pushing for ethanol blending cannot compensate for much needed structural solutions.

Rethinking India’s Energy Strategy

To achieve effective energy security, India should develop energy supply intermediates and establish value chains for domestic energy supply. Given the elevated levels of current oil imports, it is critical to develop refining capacity, integrate petrochemicals and expand storage infrastructure. Enhancing resilience within the energy supply intermediate segments (including refined fuels, chemicals, and gas-based inputs) will help buffer against supply disruptions and mitigate risks associated with fluctuating oil prices.

Investment in overseas energy assets and long-term agreements for supply with other countries is non-negotiable. Energy diplomacy should become a major focus of foreign policy, with special emphasis on strategic investments in hydrocarbon reserves in politically stable regions. This will increase the level of insulation against price fluctuations attributable to spot market and geopolitical disruptions.

Further, India must recognise the importance of accelerating the development of nuclear energy to satisfy the country's growing energy demands. Unlike other renewable energy sources (solar and wind), nuclear power is an effective and reliable alternative, capable of providing baseload electricity production not susceptible to weather conditions.

Addressing the challenges surrounding nuclear power, namely, regulatory barriers, technological constraints, funding gaps and public trust deficit requires clarity of policy, engagement with the private sector in R&D and international partnerships for nuclear development. While Small Modular Reactors (SMRs) offer a viable alternative for safe and efficient expansion of the nuclear energy capacity, sight must not be lost of pressurised heavy water reactors (PHWRs) as the ignition point of India's nuclear fuel cycle. Generating thorium-based fuel, through investment in R&D of Fast Breeder Reactors (FBRs) and Molten Salt Reactors (MSRs) is the ultimate hedge against foreign dependence for energy requirements.

This must be supplemented by building storage capacity and upgrading and modernising the electricity grid in order to achieve a modern energy system in India. Despite progress in installing solar capacity, intermittency remains major barrier to using renewables as a viable large-scale replacement for fossil fuels. To overcome this, it is important to invest in battery storage, green hydrogen and smart grid technologies.

Improving energy efficiency across industries, transport, and households can also significantly reduce overall dependence. Electric mobility, urban planning and industrial efficiency standards all have a role to play in lowering the energy intensity of growth.

Energy Security is National Security

Despite having already put in place various types of policies, including the National Energy Policy and a goal of 500 GW of non-fossil fuel capacity by 2030 and strategic petroleum reserves expansion plans, India is still short of a comprehensive energy security doctrine. A coordinated and integrated energy security plan must be adopted that combines local energy production, energy diversification, energy storage, energy technology and energy diplomacy into a single sustainable paradigm.

The Hormuz crisis should serve as a wake-up call that energy security is integral to national security. As the world becomes more fractured and conflict-prone, our reliance on distant and contested supply lines exposes us to enemy attacks, posing large-scale national security risks to our economic sovereignty. The cost of inaction is clear: Every disruption in a distant strait will undermine India’s economic growth and stability. The time has come to move from managing energy dependence to effectively mitigating it in the medium term.