India's heavy reliance on oil and gas from the Persian Gulf has become a strategic liability amid the ongoing Iran war [1].

This dependency creates immediate economic risks for New Delhi. As conflict disrupts the flow of energy, the resulting shortages of fuel and liquefied petroleum gas (LPG) drive up inflation and threaten broader national economic security.

Michael Kugelman, an expert on South Asia at the Atlantic Council, said the geopolitical conflict in the Gulf is exposing India's vulnerability to energy shocks [1]. The instability is driven by the Iran war and escalating tensions between the U.S. and Iran, which together jeopardize the stability of oil supplies flowing from the region [1].

Because India depends on these maritime routes for a significant portion of its energy needs, any disruption in the Persian Gulf has a ripple effect across the domestic economy [1]. The scarcity of LPG and other fuels puts pressure on both industrial production and household costs, a situation that complicates India's efforts to maintain price stability.

Experts said the current crisis highlights the danger of over-reliance on a single, volatile geographic region for critical resources [1]. The intersection of regional warfare and superpower tensions has transformed a long-standing trade relationship into a point of fragility for the Indian state [1].

“India's heavy reliance on oil and gas from the Persian Gulf has become a strategic liability”

India's energy crisis demonstrates that economic growth is inextricably linked to geopolitical stability in the Middle East. The shift from energy abundance to scarcity due to the Iran war suggests that New Delhi may need to aggressively diversify its energy imports and accelerate domestic alternatives to mitigate the impact of future regional conflicts.