India faces acute vulnerability to Middle East oil disruptions. As of January, the region supplied 55 percent of India's crude imports at 2.74 million barrels daily, the highest level since late 2022. Unlike China, which maintains six months of reserves, India's storage covers only 20 to 25 days of consumption. Regional conflicts and Strait of Hormuz closures threaten global oil supplies, with Brent crude already rising 7 percent. Indian refiners reduced Russian oil purchases under U.S. pressure, leaving the economy heavily dependent on Middle Eastern sources. The potential supply shock could force India to seek alternative sources or face significant fuel price increases affecting inflation and economic growth.
