NEW DELHI: Can oil really soar to $400 a barrel? That’s the headline-grabbing warning issued by Iranian state media amid rising tensions in the Gulf following Israel’s military strikes on Iran. Tehran has threatened to shut down the Strait of Hormuz — a move that could choke nearly a fifth of global oil supply.
But analysts are not convinced. While the threat is serious, most say a full blockade is unlikely. Iran itself exports 96 per cent of its oil through Hormuz. Blocking the Strait would not only hurt its own revenues but also antagonise key partners like China and risk military retaliation from the US and Gulf nations.
Still, the warnings have prompted global jitters — and India, which imports over 40 per cent of its oil and half its LNG through Hormuz, is responding with caution and calculation.
In June, Indian refiners have sharply increased their intake of Russian crude oil, importing an estimated 2.1 to 2.2 million barrels per day (bpd) — the highest in two years and more than the total bought from Iraq, Saudi Arabia, the UAE and Kuwait combined. That’s up from 1.96 million bpd in May, according to data from trade analytics firm Kpler.
Crude oil imports from the US also rose significantly to 439,000 bpd in June from 280,000 bpd in May, reflecting India’s deliberate diversification away from the Gulf.
Meanwhile, oil imports from the Middle East are expected to drop slightly to about 2 million bpd in June, down 100,000 to 150,000 bpd from May.
Hormuz
“India’s refiners are clearly rebalancing,” said Sumit Ritolia, lead analyst at Kpler. “Russian oil, which doesn’t pass through Hormuz, offers both logistical and pricing advantages at a time like this. And US and West African barrels are becoming part of the long-term risk management playbook.”
While crude and LNG flows through Hormuz remain unaffected for now, ship tracking data shows a marked decline in tanker activity in the region. The number of empty tankers heading into the Gulf has dropped, and insurers are beginning to price in risk premiums.
Even if Iran avoids a full blockade, the risk of isolated attacks or brief disruptions remains. Indian refiners are said to be watching the situation closely and may increase spot purchases from Russia, West Africa, or Latin America if July’s outlook worsens.
India also has strategic petroleum reserves covering 9–10 days of consumption and may consider price controls or subsidies if domestic fuel prices spike.
So, does the $400 oil warning hold water? Highly unlikely — but it’s making governments, including India’s, sit up and prepare for the worst while hoping for the best. For now, New Delhi is leaning on Russia, the US, and flexibility to steer through the storm.
