The war launched by the United States and Israel against Iran has entered its second week, triggering a global energy crisis. Iran's retaliatory measures threaten to draw the entire Middle East into the conflict. The Strait of Hormuz, through which approximately 20-30% of the world's crude oil and liquefied natural gas (LNG) passes, has been effectively closed due to hostilities. This has sent crude prices soaring and disrupted oil and gas supplies worldwide.
The ripple effects of the war are being felt across Asia, but India, the world's fourth-largest economy, could face a double whammy. The country depends on the Persian Gulf for its energy needs, with over 80% of its gas and up to 60% of its oil transiting the Strait of Hormuz. Additionally, some 9.1 million Indian citizens working in Gulf Cooperation Council (GCC) countries send about $50 billion in annual remittances home. Iran, invoking the right to self-defence, is using the strait as leverage, posing a severe threat to India's energy security.
In India, hotels and restaurants are considering closures, and people are queuing to stock up on LPG cylinders despite government assurances of a one-month supply. Panic has prompted authorities to invoke emergency measures to discourage hoarding. Iran's Islamic Revolutionary Guard Corps (IRGC) stated it would not allow "one litre of oil" to pass through the strait, warning that prices could reach $200 per barrel.
The International Energy Agency's (IEA) move to release a record 400 million barrels of crude oil has failed to stabilise prices. Experts warn that energy market volatility and rising costs could translate into broader economic and inflationary pressures for India. Indian blue-collar workers and professionals in the region express fears over potential job losses and physical safety amid expanding Iranian attacks.
If the conflict spirals out of control, India would face the monumental challenge of evacuating its citizens, who form the largest expatriate community in most Gulf nations. A former Indian ambassador to Saudi Arabia noted that evacuating 9-10 million people in a war situation is virtually impossible. India's Ministry of External Affairs has set up a special control room to monitor the situation, and embassies have established round-the-clock helplines.
India's main opposition Congress party has criticised the government for its silence on the killing of Iran's Supreme Leader. Prime Minister Narendra Modi's visit to Israel just days before the war began has also drawn criticism, with analysts suggesting it accorded legitimacy to the Israeli leadership. Experts indicate that India may need to seek alternative energy sources, such as Russian oil, if the conflict expands further.
Source: www.aljazeera.com