Amid growing risks in the strategic waterway, India has taken significant steps to safeguard its energy security. S&P Global Energy analysis indicates that India has started importing crude oil and LNG through alternative routes involving the United Arab Emirates and Oman to reduce dependence on the Strait of Hormuz amid increasing security threats.
Iran has recently warned that if its oil exports are blocked, it could target alternative routes, including the Fujairah pipeline and Saudi Arabia’s East-West pipeline. Such threats have increased concerns over potential disruptions to global energy supplies, including those affecting India.
Data from S&P Global Energy shows that LNG vessel movement through the Strait of Hormuz has declined sharply. At the end of June, an average of 0.8 LNG vessels were passing through the route daily, but by July 15, the number had fallen to only 0.2 vessels per day.
Over the past week, only one LNG vessel has managed to exit the Persian Gulf. The decline in maritime movement follows an attack on QatarEnergy’s vessel “Al Rekayyat” on July 7, which has triggered widespread concern among ship owners and increased security fears in the region.
Large LNG Stockpile Trapped Inside the Gulf
Mehroon Atebari, Senior Principal Analyst at S&P Global Energy, stated that LNG movement through the Strait of Hormuz has returned to the low levels witnessed at the beginning of June. The primary reason behind declining exports is not a reduction in LNG production but restrictions and delays affecting vessel movement.
Despite the shipping disruptions, LNG production and vessel loading operations at companies such as QatarEnergy and the United Arab Emirates-based ADNOC continue at normal levels. However, with outbound routes becoming increasingly restricted, a significant volume of LNG stock has accumulated inside the Persian Gulf.
By mid-July, an estimated 570,000 metric tonnes of LNG were stranded across seven vessels belonging to Qatar. Overall, LNG tankers with a combined capacity of nearly 1.9 million metric tonnes are currently positioned inside the Persian Gulf. This volume is equivalent to approximately eight days of total exports recorded before the conflict-related disruptions.
India imports a substantial share of its energy requirements from countries located in the Persian Gulf region. If the Strait of Hormuz crisis continues for an extended period, India may face higher logistics costs due to increased reliance on alternative import routes through the United Arab Emirates and Oman.
However, experts estimate that if maritime access through the Strait improves in the coming weeks, the large LNG stock currently trapped inside the Gulf could rapidly enter global markets, providing significant relief to energy-importing countries, including India.
The ongoing disruption highlights the strategic importance of the Strait of Hormuz for global energy trade and raises concerns over the vulnerability of international supply chains amid escalating geopolitical tensions.
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