Asia’s two largest energy consumers, India and China, both source roughly half of their crude imports from the Middle East. Analysts say India is in a more precarious position because it holds significantly lower inventories than China and has become more reliant on the region over the past year.
Ajay Parmar, director of energy and refining at ICIS, said China has at least six months’ worth of crude supplies in storage, while India’s inventories are much lower, leaving it more exposed in the current situation.
The risks stem from escalating hostilities following Israeli and US strikes on Iran, which have triggered wider regional tensions and effectively shut the Strait of Hormuz, a vital shipping chokepoint through which about one-fifth of the world’s oil passes. Global benchmark Brent crude rose about 7% on Monday, and analysts warned that a prolonged conflict could push fuel costs significantly higher.
The Middle East accounted for about 55% of India’s crude imports as of January, or roughly 2.74 million barrels per day, data cited in the Reuters report showed. That marks the highest level since late 2022, as Indian refiners trimmed purchases of Russian oil amid pressure from Washington.
India’s official buffer appears limited. Oil Minister Hardeep Singh Puri told lawmakers last month that the country can store enough crude and fuel to last around 74 days. However, refining sources said current effective inventories may cover only about 20 to 25 days, underscoring the country’s vulnerability if shipments are disrupted for an extended period.
Uncertain Alternatives
A sustained supply crunch could compel India to seek alternative sources of crude. The federal oil ministry said in a post on X that the country would take all necessary steps to ensure fuel availability at affordable prices.
US officials did not immediately respond to requests for comment on whether Washington would permit India to resume larger-scale purchases of Russian oil without triggering a 25% tariff on imports. US Secretary of State Marco Rubio said the Departments of Treasury and Energy would announce measures aimed at mitigating rising energy prices.
Asia as a whole buys nearly 90% of the Middle East’s oil exports. Japan and South Korea are even more reliant on the region for supplies, sourcing about 95% and 70% of their oil respectively, but both maintain far larger inventory buffers. Japan’s reserves are equivalent to 254 days of consumption, while a South Korean government official said stockpiles can cover around 208 days.
Broader Global Impact
While Europe and the United States are not major buyers of Middle Eastern crude, analysts said any prolonged disruption through the Strait of Hormuz would drive up global oil prices, affecting all importing nations.
Parmar said that if the Strait remains out of use for an extended period, countries worldwide would compete aggressively for incremental barrels of supply.
US data showed that last year America imported less than 900,000 barrels per day from Gulf countries.
For India, the combination of rising import dependence and limited storage capacity leaves it especially exposed to prolonged instability in the Middle East, heightening the stakes as the conflict unfolds.
