The ever-widening conflict involving Iran, US and Israel has severely disrupted oil and gas flows through the Strait of Hormuz — a critical artery for global energy supply.After Israel and the US launched military strikes in Iran, Tehran retaliated by targeting other Gulf countries that house American military interests. Late Saturday, Iran’s Islamic Revolutionary Guards Corps (IRGC) transmitted messages to vessels saying that the strait had been closed. There was no official declaration to this effect from Tehran.Whether or not Iran is blocking the Strait, a large number of trading houses, insurers and vessels have suspended shipments through the maritime passage. According to reports, hundreds of tankers have dropped anchor in open Gulf waters.Suspension or heavy curtailment of oil and gas flows through the Strait is bound to have implications for the global energy markets, including India, which depends on the waterway for receiving a bulk of its oil and gas imports. Also Read | As ships halt Hormuz transits, why insurers are rushing to cancel war risk coversThe impact will worsen with the duration of the disruption, though experts believe it won’t be a protracted one.According to industry insiders and experts, India is well positioned to stave off a major short-term supply shock when it comes to oil imports as it has alternative sources of supply. Story continues below this adIt will, however, have to pay higher energy prices as a result of the conflict. In the case of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) imports, where India’s dependence on the Strait of Hormuz is relatively higher than oil, the challenge could be greater — securing supplies while also paying a higher price for imports.India’s near-term optionsThe Strait of Hormuz, the world’s most important oil transit chokepoint, is a narrow waterway between Iran and Oman that connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. It handles approximately one-fifth of global liquid petroleum consumption and global LNG trade. Around 15 million barrels of crude pass through the Strait every day. While some pipelines exist in the Gulf states to bypass the waterway, their capacity is limited. Even at full utilisation, nine million barrels per day (bpd) — or 9% of global demand — would remain structurally at risk if the strait is closed, according to industry experts.Story continues below this adAlso Read | Before he ruled Iran, Ayatollah Khamenei visited Karnataka and KashmirAround half of India’s total oil imports — roughly 2.5-2.7 million barrels per day (bpd) — pass through the strait from countries such as Iraq, Saudi Arabia, the UAE and Kuwait. India is the world’s third largest consumer of crude oil with an import dependency level of over 88%. The majority of the country’s gas consumption is also met through imports, and oil and gas supplies from West Asia are critical for India.Indian refiners already have crude inventories of over 10 days, along with around a week’s worth of fuel stocks. To cover any potential shortfall in import volumes, India could draw on its strategic petroleum reserves, accelerate spot procurement from non-Hormuz regions, and deepen supply contracts with alternative suppliers. Diversification options include increased sourcing from Russia, the US, West Africa, and Latin America. Moreover, there is continued availability of Russian cargoes in the Indian Ocean and Arabian Sea region, including volumes in floating storage. This volume build-up was a result of Indian refiners substantially reducing their intake of Russian crude.Story continues below this ad“In a scenario where Middle Eastern imports become constrained or show signs of disruption, Indian refiners — potentially with policy backing — could pivot back to Russian cargoes relatively quickly. From a national energy security standpoint, this flexibility provides India with an additional buffer against short-term geopolitical shocks. Overall, while a Strait of Hormuz disruption would create immediate volatility, India’s diversified sourcing strategy and the presence of alternative barrels in nearby waters reduce the risk of a sustained supply crisis,” said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at commodity market analytics firm Kpler.According to him, LPG imports are the “bigger vulnerability” for India, as the country imports 80–85% of its LPG needs, with the majority sourced from Gulf suppliers and almost entirely transiting Hormuz. And unlike crude, India does not maintain strategic LPG reserves of comparable scale, making LPG flows more logistically sensitive in a disruption scenario as India has “thinner structural buffers” when it comes to LPG. Similarly, around 60% of India’s LNG imports pass through the strait and, like LPG, there are no structural buffers in place. Unlike crude, where enough availability is there in the spot market, LPG and LNG spot cargo availability is thin. The supply situation for these two fuels might become challenging for India in the event of a protracted Hormuz closure.Story continues below this ad Daily tanker positions along the Strait of Hormuz from Feb 1 to Feb 15. The New York TimesLikely duration, price impactAs tensions between Washington and Tehran refused to die down and the risk of possible US military strikes and regional conflict became increasingly credible, benchmark Brent crude prices ended the week well over $72 per barrel, the highest since late July of last year. With the major escalation in the conflict, the war premium in oil prices could jump when markets open after the weekend break.Every $1 per barrel increase in oil price could raise India’s oil import bill by $1.8-2 billion on an annualised basis.“This (disruption in vessel traffic in the Strait of Hormuz) appears to be driven by heightened tensions and precautionary decisions by ship operators and insurers rather than a confirmed physical blockade by Iran. From a market perspective, however, the distinction is secondary. Whether the Strait is closed by force or rendered inaccessible by risk avoidance, the impact on flows is largely the same. Nations with strategic petroleum reserves may take action and release volumes if the disruption of the Strait risks being extended. Unless de-escalation signals emerge swiftly, we expect a significant upward repricing of oil at the start of the week,” said Jorge Leon, senior vice president and head of geopolitical analysis at Rystad Energy.Story continues below this adAs in the case of physical oil supply, the oil price trajectory in the near future would largely depend on how the conflict shapes up, and for how long energy flows via Hormuz remain suspended or disrupted. In scenarios of a prolonged regional conflict and supply disruption from Hormuz, oil prices could top $100 per barrel, according to analysts.While Iran has frequently threatened to close the strait in the past, it has actually never done it. Although the current situation is graver than past conflicts and Iran’s threat pertaining to Hormuz is far more credible, energy and trade experts still believe that any blockade or disruption won’t last too long.Also Read | Ayatollah Ali Khamenei dead: How the Supreme Leader transformed IranGulf oil and gas producers, including Iran, depend on the passageway for uninterrupted revenues from energy exports.“If the Strait of Hormuz were to close, the most likely scenario is that it would be temporary, potentially lasting one to two weeks. A prolonged closure would carry severe geopolitical consequences and likely provoke a rapid international response. That said, even a short-lived disruption would create a significant logistical backlog. Tanker congestion, rescheduling of cargoes, and port delays could take several additional weeks to normalize, meaning the market impact would likely persist well beyond the formal reopening of transit lanes,” Leon said.Story continues below this ad“If we observe signs of reduced crude flows or lower transit volumes through the Strait of Hormuz, or even in the extreme case of a temporary blockade, the disruption is likely to be short-lived. Given the US military presence in the region and the combined maritime capabilities of GCC (Gulf Cooperation Council) countries, any major obstruction would probably be addressed within a few days rather than becoming a prolonged event,” Ritolia said.Analysts also believe a full blockade could alienate Iran’s key allies like China, which is the destination for most of Tehran’s own oil. A blockade would also infringe upon Oman’s territorial waters, souring relations with a neighbour that serves as a vital back-channel for diplomacy with the US.