March 18, 2026
News, Asia-Pacific, Middle East & North Africa, North America, Defence & Security, International Relations, International Trade & Development

From Hormuz to Home: When Geopolitics Reaches the Doorstep

By Aditi Ambekar

The intensifying conflict in the Middle East, precipitated by US-Israeli strikes on Iran and Tehran’s threat to close the Strait of Hormuz, underscores the structural vulnerabilities of global energy and trade networks. For India, the crisis has profound implications for energy security, supply chain stability, and domestic economic resilience, while simultaneously challenging its capacity to exercise strategic autonomy and manage complex geopolitical contingencies in a volatile regional and international context.

The escalating tensions between the United States, Israel, and Iran have reached a deadly point following coordinated US-Israeli strikes on Iranian sites under “Operation Epic Fury” on February 28 (BBC News, 2026). The operation apparently targeted Iran’s missile infrastructure, important military installations, and top leadership in the country’s capital, Tehran, as well as other strategic places nationwide. Consequently, Iran launched retaliatory drone strikes against US bases in various West Asian countries, including Israel, Saudi Arabia, the UAE, Bahrain, Kuwait, Jordan, and Qatar. The attacks resonated throughout the region, not only interrupting daily lives but also causing damage to crucial infrastructure such as oil refineries, commercial enterprises, data centers, and key hospitality hubs, impacting the region’s overall economic and global connections.

However, the cycle of attacks and counterattacks did not end there. The crisis escalated further when Iran declared the closure of the Strait of Hormuz and warned that any vessels attempting to traverse the key waterway would be targeted as hostilities grew. This move worsened regional tensions and raised global concerns about the security of maritime trade and energy flows traveling through one of the world’s most important shipping lanes.

Hormuz: A Weaponised Chokepoint

Iran’s threat to close the Strait of Hormuz substantially altered the strategic landscape, spreading the conflict’s ripples far beyond the immediate region. The strait is a critical maritime corridor and the only sea passage connecting the Persian Gulf, the Gulf of Oman, and the Arabian Sea. The route carries 20–30% of world oil trade and almost one-fifth of Liquefied Natural Gas (LNG) exports from producers such as Saudi Arabia, Iraq, Kuwait, Qatar, the United Arab Emirates, and Iran, with around 80% of these supplies going to Asian markets such as China, India, Japan, and Korea (UNCTAD, 2026). Given its strategic significance and the high level of global reliance on this route for energy trade and maritime logistics, any disruption exposes the vulnerabilities of a more integrated but fragile global economy. The potential closure of the strait also demonstrates how geographically distant geopolitical conflicts may quickly turn into economic and strategic concerns for countries around the world, including India.

This move by Iran can be viewed as an attempt to challenge the US offensive position by displaying its potential to disrupt a critical global chokepoint, thereby transforming geographical advantage into strategic bargaining power. The episode also echoes Alfred Thayer Mahan’s ideas, which asserted that control over sea lanes and vital maritime passages is a critical pillar of national strength. This reasoning can be seen in contemporary geopolitics as Chokepoint Politics, in which states use their territorial dominance over limited maritime corridors to apply strategic pressure during conflicts. Rather than engaging in direct military escalation, Iran’s plan represents the weaponization of geography, demonstrating how control over maritime passages may be utilized as tools for power projection. Meanwhile, Tehran is attempting to convey that any strategic or economic pressure will not go unanswered, reviving the logic that “an eye for an eye makes the whole world blind” while reminding the world that escalation in such interconnected systems risks harming not only involved parties or nearby nations, but the entire globe and the global economy.

What initially appeared to many Indians as a distant geopolitical issue has gradually taken on palpable home relevance. For India, the implications are not limited to the potential interruption of the Strait of Hormuz. The country’s strong socioeconomic ties with West Asia, including a substantial diaspora, demonstrate that regional instability has spiraling political, economic, and humanitarian consequences at home. They also underscore how developments in distant geopolitical theatres can shape domestic debates, policy priorities, and everyday economic realities. In this sense, the crisis reinforces a long-standing principle of international relations articulated by Jawaharlal Nehru: that foreign policy is an extension of domestic politics.

The ongoing conflict reveals the extent of India’s strategic and economic reliance on West Asia and highlights how geopolitical turbulence can strain India’s policy calculations and foreign policy choices. These geopolitical shocks have opened a Pandora’s box with immediate and apparent consequences, affecting energy flows, trade routes, and supply chains that connect India to West Asia, putting substantial strain on the Indian economy.

India’s Energy Lifelines Under Pressure

In FY2025, about half of India’s crude oil imports and approximately 54% of its LNG supplies transit through the Strait of Hormuz. An estimated 1.5–2 million barrels per day of India’s crude imports pass through this narrow chokepoint (Mondal, 2026). Additionally, around 60% of India’s LPG is imported, with significant imports coming from countries such as Saudi Arabia and Qatar (Kalyanaraman, 2026). Taken together, these data highlight the Strait of Hormuz’s critical role in ensuring India’s energy security.

Now the question comes: shouldn’t New Delhi be prepared to secure the sources of its energy when it decides to increase LPG coverage to nearly 100% of households, up from 62% in 2016 under the Pradhan Mantri Ujjwala Yojana scheme, whereas nearly half of imported refinery products (by volume) are used in the road transport sector (Mohan & Jha, 2025)? Furthermore, crude oil and its derivatives play an important part in the production of everyday consumer products such as detergents, biscuits, toothpaste, paints, packaging materials, soaps, shampoos, creams, hair oils, bottles, and tubes. These derivatives account for more than a quarter of input costs and over 40% for paint makers (Payal, 2026).

In response to rising energy demands, India has expanded and diversified its crude oil imports from roughly forty nations, up from about twenty-seven a decade ago, reducing the risks associated with supply disruptions. According to the U.S. Energy Information Administration (US EIA), by 2023, imports from Russia accounted for about 39% of India’s crude purchases, with the balance coming primarily from sources in West Asia and the United States. However, rising tariff pressures from the United States in recent months have changed this pattern. As a result, Russia’s share of India’s oil imports fell to 19.3% in January 2026, increasing and partly retaining supplies from Gulf countries, which include 16.6% from Iraq, 17.5% from Saudi Arabia, 10.4% from the United Arab Emirates, and 6.1% from Kuwait, along with approximately 6.8% from the United States (Raghavan, 2026).

These fluctuating import patterns highlight why New Delhi remains exposed to such crises despite mitigation strategies. While India’s Strategic Petroleum Reserves can sustain fuel supplies for six to eight weeks, helping to mitigate immediate shortages of petrol, diesel, and LPG, the government has significantly less buffer in the case of LNG, where large-scale stockpiling is far more challenging. This vulnerability becomes more evident when key suppliers, such as Qatar, India’s largest LNG source, have production outages, as a couple of its facilities were attacked by Iran.

A problem that began well beyond India’s borders is now beginning to touch domestic homes and businesses. Indiameets around 62% of its LPG demand through imports, with 87% of consumption occurring in the household sector and the rest in commercial establishments. This reflects the very complex economic interdependence among economies and energy markets. Moreover, recent supply disruptions have led to LPG shortages, particularly affecting commercial users such as restaurants, street vendors, and small food businesses across major cities.

Though the Indian government has reiterated its position, stating that measures are being undertaken to ensure the continued availability of petroleum products and to safeguard India’s energy security in the evolving global situation, the reality shows a contrasting picture. In Mumbai, industry associations estimate that nearly 20% of hotels and restaurants have already closed, with up to half of the outlets potentially closing within days if the shortages persist, demonstrating how geopolitical energy disruptions can act as a tipping point for geoeconomic spillover effects, resulting in domestic economic and employment pressures (Mutha, 2026).

Energy Security in the Grip of Geopolitics

The challenge is further compounded by the fact that India is not the only country affected by disruptions in the Strait of Hormuz. Major energy importers, including China, Japan, South Korea, and several European economies, therefore face similar vulnerabilities. Escalating attacks on cargo vessels in the strait have heightened fears about supply shortages, while rerouting ships around the Cape of Good Hope and rising insurance premiums have further increased shipping costs, collectively placing upward pressure on global oil prices. As a result, global oil prices have surged to about $100 per barrel, and could rise further if tensions persist. This increase occurred despite the International Energy Agency’s decision to release a record 400 million barrels of oil to mitigate the economic impact of the US-Israeli war with Iran (Chia, 2026). However, such emergency releases are usually regarded as a temporary buffer rather than a long-term solution to the fragility of global energy markets.

While the closing of a major maritime chokepoint would impact practically all energy-dependent countries, China appears to be an outlier in this unfolding drama. The reasons for this relative insulation deserve further review, but the pressing question is whether New Delhi has been able to establish a similar strategic cushion. Throughout the crisis, India is trying to strike a delicate diplomatic balance, though not necessarily with the same leverage as China. Reports that Iran may have shown restraint toward Chinese vessels passing through the Strait of Hormuz emphasize the changing geopolitical realities surrounding the crisis, demonstrating how strategic partnerships can affect behavior during times of regional conflict (Bao, 2026). India has sought strategic balance in its relations with Iran, Israel, and the United States, despite their longstanding rivalry. Investments of more than $500 million at Chabahar Port reflect New Delhi’s desire to maintain strategic ties with Tehran and establish a foothold in the region’s changing geoeconomic landscape.

While India has attempted to balance competing geopolitical poles, mounting tariff pressures from the United States have further complicated India’s strategic choices. As previously discussed, New Delhi is reducing its reliance on discounted Russian oil while increasing imports from West Asia and the United States, partially due to economic and diplomatic pressures. The situation grew more difficult when a recent US statement claiming that it had “allowed India to buy oil from Russia” generated controversy regarding India’s strategic autonomy, sovereignty, and the limits of policy independence within a deeply globalised system of economic interdependence (Mollan, 2026). Although New Delhi eventually asserted and clarified that its economic policies are still sovereign, the episode highlights Washington’s ongoing attempt to play hegemon in the global economic arena and exercise influence in international relations.

At the same time, New Delhi refrained from explicitly denouncing or approving Tel Aviv’s actions even as they carried potential implications for India’s energy security (Awasthi, 2026). Instead, India maintained a carefully calibrated diplomatic position that emphasized caution and appeals for dialogue. This approach illustrates a pragmatic balancing strategy in international affairs, allowing New Delhi to avoid entanglement in competing geopolitical alignments. Collectively, the experience serves as a reminder for New Delhi that handling great-power pressures while protecting national interests necessitates careful diplomatic calibration and a renewed emphasis on strategic autonomy in foreign policy.

Yet the question remains: is this crisis only about energy supplies? While it has historically been the foundation of India–West Asia relations, the region’s importance to India goes far beyond oil and gas. Today’s economic relationship is inextricably linked in a complex web of trade flows, shipping routes, investment ties, and labor mobility. These networks represent the realities of complex interdependence, in which shocks in a single sector, such as energy, can rapidly ripple throughout the economy. Understanding these broader geoeconomic links is critical for comprehending how geopolitical instability in West Asia can lead to supply chain disruptions, trade volatility, and economic uncertainty in India.

Since 1992, India–Israel trade and economic ties have grown. According to official data, in FY 2024–2025, bilateral trade fell to US$ 3.75 billion due to regional security issues and trade disruptions, with India’s exports at USD 2.1 billion and imports at USD 1.6 billion.

Beyond Oil and Gas: The Wider Geoeconomic Spillovers

Beyond energy imports, New Delhi shares deep economic ties not only with Iran but with much of West Asia. The disruption may harm fertilizer supply for the upcoming Kharif season, as Iran is a significant supplier of urea and ammonia. More broadly, Saudi Arabia, Iran, Iraq, the UAE, and Yemen account for over half of India’s basmati exports. Furthermore, India imports around 5–6 million tonnes of pulses every year, which may face supply disruptions due to logistical shocks. Moreover, the ripple effects also extend to India’s apparel and textile exports, as vessels bound for the United States or Europe will be redirected via the Cape of Good Hope, adding 20–25 days to transit time (“The cost Indians may have to pay”, 2026). Furthermore, India’s expanding electronics commerce with the Gulf may suffer, as the UAE and Saudi Arabia are significant markets for Indian technology exports. The entire case demonstrates how regional instability may quickly spread throughout trade, agriculture, and technological supply chains.

Similarly, New Delhi maintains expanding economic, agricultural, and technological ties with Israel, with bilateral trade reaching about $3.75 billion in FY 2024–25 (“India-Israel trade ties”, 2026). India’s foreign investment in Israel has risen to roughly $443 million, boosted by the Adani Group’s acquisition of the Haifa Port. While the group has stated that the port remains secure, the broader regional instability and security concerns raise doubts about potential risks to trade flows and business operations.

The overall picture indicates a growing demand–supply mismatch, which could lead to structural economic difficulties. Falling agricultural produce prices, along with increased food import costs, risk compounding current stresses caused by delays in oil and LPG supplies, fueling inflationary pressures. The pattern clearly demonstrates the weaknesses and fragilities of deeply integrated economies such as India.

India–West Asia relations extend far beyond trade and energy flows, underpinned by deep people-to-people ties. According to the Ministry of External Affairs (India), nearly one crore Indians live and work in West Asia, making the safety and well-being of the diaspora a top priority for New Delhi (Bhattacherjee, 2026). These people play an important role in supporting India’s economic structure through remittances, particularly in states such as Kerala, Karnataka, Tamil Nadu, and Maharashtra, where people rely heavily on these financial inflows (Ashokamithran, 2025). Prolonged instability in West Asia could therefore disrupt remittance flows, reducing household purchasing power in these states. Coupled with rising oil prices and unpredictable financial markets, such pressures might strain India’s current account deficit, exposing the region’s broader economic vulnerability caused by geopolitical turbulence (Jeelani, 2026).

India’s Strategic Way Forward

Historically, New Delhi has maintained its strategic autonomy, avoiding alignment with any single power bloc throughout significant geopolitical crises. In the current instance, however, the US has attempted to put subtle pressure on India through soft balancing methods that Washington may have expected to result in bandwagoning. However, Iran’s unexpected and sustained retaliation, combined with its weaponization of geography via strategic leverage of the Strait of Hormuz, has reminded the energy-dependent world that national interests will always take precedence over external strategic pressure, even if it comes from a self-proclaimed superpower.

For India, the episode offers an important policy lesson. Preventing a future LPG crisis demands both short-term diplomatic maneuvering and long-term structural readiness. To reduce its vulnerability to supply shocks caused by faraway geopolitical conflicts, New Delhi may need to diversify shipping routes, reinforce strategic reserves while enhancing domestic LPG production, and work closely with important partners not only in West Asia but also with other global partners to stabilize energy supply. New Delhi also needs to expedite efforts toward energy self-reliance through initiatives such as Atmanirbhar Bharat. Similar caution would be required for petroleum imports, as disruptions at maritime chokepoints could easily spread beyond LPG to damage broader energy supplies.

Collectively, India will face the task of maintaining a delicate balance. While signals from Tehran suggesting continued goodwill toward India remain significant, pressure from Washington, particularly its decision to list India among countries engaging in “unfair trade practices” over Russian oil, demonstrates the complex strategic landscape that New Delhi must manage. At the same time, New Delhi’s diplomatic balancing in the face of rising tensions between Israel and Iran must not be overlooked. India’s ability to preserve working relationships with both sides, each recognizing India as a reliable partner throughout a crisis, demonstrates the success of its calibrated diplomacy.

Going forward, India will need to carefully balance its long-standing cultural and people-to-people ties with Iran while maintaining its enduring partnership with the United States and preserving cordial relations with other regional actors across West Asia and Israel. Finally, how New Delhi maintains diplomatic equilibrium while developing domestic energy resilience will determine its ability to protect national interests in an increasingly volatile geopolitical scenario.

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