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 has once again revealed a harsh reality: India’s energy security remains extremely vulnerable to geopolitical shocks far beyond its borders. As India aspires to become a $5 trillion economy and a global manufacturing hub, the fragility of its energy lines is now a strategic concern that must be addressed structurally rather than periodically.

The bulk of India’s crude oil imports pass through the Strait of Hormuz, a narrow sea corridor that handles about a fifth of global oil trade. The increased tension has led to a sharp increase in insurance premiums for ships passing through. Tanker operators are either demanding higher freight rates or avoiding the route altogether. Even the presence of US warships offers limited assurance. Using asymmetric tactics, Iran could easily disrupt shipping in Hormuz, making it one of the most vulnerable points in global trade.

Choke Points and Fragile Lifelines

This crisis underscores a larger problem: International energy trade is inherently fragile because it is concentrated at a few critical chokepoints at sea. There are six such global arteries from west to east: the Suez Canal and the Bab el-Mandeb Strait; Strait of Hormuz; The Malacca Strait, Sunda Strait and the deeper Lombok Strait are used by Very Large and Ultra Large crude oil vessels with Dead Weight Tonnage ranging from 200,000-3,20,000.

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

The impact of power outage at any congestion point could have ripple effects across the supply chain for Indian consumers in the form of price increases, delay in rerouting of cargo, shortages in transportation services. Due to the interconnectedness of global energy markets, even a disruption, not just a blocking of deliveries of goods to India, could raise prices and destabilize the domestic energy market. Therefore, energy sovereignty cannot be achieved by simply securing supply lines; It requires completely reducing dependence on vulnerable external systems.

Increasing Addiction

In fact, India’s energy dependency has worsened over time. In 2013-14, India imported nearly 77 percent of its crude oil needs. In 2025, this figure increased to over 85 percent. In the same period, liquefied natural gas imports increased from 30 percent to 47 percent, respectively. Despite attempts to diversify suppliers (buying discounted oil from Russia between April 2022 and November 2025) as well as buying discounted oil from the United States and Latin America, the fundamental vulnerability remains unchanged: the country is still heavily dependent on imports.

In a world where supply shocks are becoming more frequent and unpredictable, expanding strategic oil reserves, promoting renewable energy sources and promoting ethanol blending cannot compensate for much-needed structural solutions.

Rethinking India’s Energy Strategy

To ensure effective energy security, India needs to develop energy supply intermediates and create value chains for domestic energy supply. Given the current high levels of oil imports, developing refining capacity, integrating petrochemicals and expanding storage infrastructure is critical. Increasing flexibility in energy supply intermediate segments (including refined fuels, chemicals and gas-based inputs) will help buffer against supply disruptions and reduce risks from fluctuating oil prices.

Investing in foreign energy assets and making long-term supply agreements with other countries are non-negotiable. Energy diplomacy should be made the main focus of foreign policy, with special attention to strategic investments in hydrocarbon reserves in politically stable regions. This will increase the level of insulation against price fluctuations that may arise from spot market and geopolitical disruptions.

Additionally, India must recognize the importance of accelerating the development of nuclear energy to meet the country’s growing energy demands. Nuclear energy, unlike other renewable energy sources (solar and wind), is an effective and reliable alternative that can provide baseload electricity production that is not affected by weather conditions.

Addressing nuclear energy challenges, namely regulatory hurdles, technological constraints, financing gaps, and the public confidence gap, requires policy clarity, 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 nuclear power capacity, pressurized heavy water reactors (PHWRs), the ignition point of India’s nuclear fuel cycle, should not be overlooked. Producing thorium-based fuel through investment in R&D of Fast Breeder Reactors (FBRs) and Molten Salt Reactors (MSRs) is the ultimate safeguard against external dependence on energy requirements.

This should be supported by building storage capacity and upgrading and modernizing the power grid to achieve a modern energy system in India. Despite progress in installing solar power capacity, intermittency remains a major obstacle to using renewable energy sources as a large-scale alternative to fossil fuels. To overcome this, it is important to invest in battery storage, green hydrogen and smart grid technologies.

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

Energy Security is National Security

Despite having already implemented various types of policies, including a National Energy Policy and a target of 500 GW of non-fossil fuel capacity by 2030 and plans to expand strategic oil reserves, India still lacks a comprehensive energy security doctrine. A coordinated and integrated energy security plan should be adopted that combines local energy production, energy diversification, energy storage, energy technology and energy diplomacy in a single sustainable paradigm.

The Hormuz crisis should serve as a wake-up call that energy security is an integral part of national security. As the world becomes more fragmented and conflict-prone, our dependence on distant and contested supply lines exposes us to enemy attacks and poses large-scale national security risks to our economic independence. The cost of inaction is clear: Any disruption in a distant strait will harm India’s economic growth and stability. It is time to move from managing energy dependence to effectively reducing it in the medium term.