UPSC Mains
GS Paper III
Energy Security
India’s Crude Oil Options Amid Red Sea Conflict: UPSC Mains Notes
A Houthi blockade threat against Saudi-linked tankers in the Bab el-Mandeb strait, combined with Ukrainian strikes on Russian export infrastructure, is squeezing two of India’s largest crude oil supply lines at once.
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Oil Import Dependence
Over 88%
Share of India’s oil requirement met via imports
Russian Crude Share
50%+ of Imports (June 2026)
~2.6 million bpd via the Red Sea route
Key Chokepoint
Bab el-Mandeb Strait
Under Houthi blockade threat
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India’s Crude Oil Crisis: Context and Background
- Yemen-based Houthis announced they would target Saudi Arabian tankers crossing the Bab el-Mandeb strait, which connects the Red Sea to the Gulf of Aden and the Arabian Sea, and have since attacked a few Saudi-linked ships.
- Russian crude made up over 50% of India’s oil imports in June 2026, with approximately 2.6 million barrels per day flowing to India via the Red Sea route.
- India depends on imports to meet over 88% of its total oil requirement, leaving it highly exposed to disruptions along either supply line.
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Key Aspects: India’s Crude Supply Vulnerabilities
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Dual Chokepoints
- Saudi Arabia has been using Bab el-Mandeb to export oil, including shipments bound for India.
- The Houthi blockade on Saudi-linked ships forces tankers to sail westward via the Suez Canal and then around Africa — a circuitous route that adds up to four weeks to delivery timelines.
- The Suez Canal–Red Sea route is also the primary corridor for Russian oil reaching India, and remains currently safe from Houthi attacks, as it was earlier.
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Russian Oil Risk
- Ukrainian strikes have damaged Russia’s export infrastructure, raising concerns over sustained supply availability.
- The key risk is whether Russia can maintain higher export volumes given continued Ukrainian attacks on its oil facilities.
- The Novorossiysk terminal halted operations last week following Ukrainian attacks on regional oil infrastructure — it handles about 40,000 bpd of the Russian crude that comes to India.
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Challenges Facing India’s Energy Security
- Bab el-Mandeb Blockade: Houthi attacks would force Saudi tankers onto longer routes, adding both cost and delivery time.
- Russian Export Uncertainty: Russia’s crude exports could fall by as much as 1 million bpd if refinery operations are further disrupted.
- Price Premium Return: Russian Urals crude traded at around a $7-per-barrel discount to Dubai before the war, but premiums have now returned.
- Urals Availability Constraint: China and Turkey are competing for the same Russian barrels, limiting India’s access to discounted Urals crude.
- Red Sea Dependency: Over 50% of India’s oil imports transit through the strategically vulnerable Red Sea corridor.
- Alternative Supply Gaps: Incremental availability of alternative Black Sea crude remains limited due to competing demand.
- Commercial Inventory Risk: Refiners are drawing on commercial crude inventories to bridge temporary supply gaps, which is not a sustainable long-term buffer.
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India now faces simultaneous pressure on both its Middle Eastern and Russian crude supply lines — a scenario where a single geopolitical shock (Red Sea) and a single military conflict (Russia-Ukraine) can compound into a broader energy security risk.
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Way Forward: India’s Energy Diversification Strategy
Expand American & South American Sourcing
Increase purchases from these regions, despite longer voyage times posing a challenge for Indian refiners.
Maximise Urals Absorption
Absorb as much discounted Urals crude as incremental availability allows.
Use Commercial Inventories Strategically
Draw on commercial crude inventories to bridge temporary supply disruptions without over-relying on them.
Expand Strategic Petroleum Reserves
Build up SPR capacity to provide a meaningful buffer against future supply shocks.
Diversify Suppliers
Reduce dependence on any single supplier by actively engaging West African and Latin American producers.
Manage Freight Costs
Negotiate long-term freight contracts to control rising shipping costs from more distant alternative sources.
Engage Saudi Arabia on Routes
Pursue dialogue with Saudi Arabia to develop alternative export routes bypassing Bab el-Mandeb for India-bound shipments.
The strategic takeaway: India’s energy security now depends as much on diversifying supply routes and reserves as on diversifying suppliers themselves.
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Source: Indian Express
