India Oil Supply Resilient: OPEC Split to Mitigate Hormuz Blockade Impact

Despite the closure of the Strait of Hormuz, India's oil supply remains resilient at 4.4 million bpd. The split within OPEC and UAE's exit are expected to boost competition, helping India mitigate supply disruptions from Iraq through alternative routes and partners.

India's oil supply remains largely unaffected despite the ongoing closure of the Strait of Hormuz, as internal divisions within OPEC are poised to benefit the nation. 8 million bpd. This shortfall of 440,000 bpd is expected to be offset by the split within OPEC, which will allow for increased competition and independent supply chains.

OPEC Split and Strategic Advantages for India

The growing friction among petroleum-exporting nations amidst the Hormuz crisis presents a significant opportunity for India. Following the United Arab Emirates' (UAE) exit from OPEC and OPEC+, global market competition is set to intensify, directly benefiting major consumers like India. While the Iran conflict and the subsequent closure of the Strait of Hormuz initially led to a dip in supply, the current discord within OPEC is expected to bridge that gap. Currently, the blockade has resulted in an average loss of 480,000 bpd for India, with supplies from countries like Iraq coming to a complete standstill.

Alternative Routes: Saudi Arabia and UAE's Role

India has successfully leveraged alternative maritime routes to maintain its oil inflow.

Diversification: Increased Imports from Oman and Venezuela

To mitigate the impact of the Hormuz closure, India has drastically increased its oil procurement from Oman and Venezuela. Imports from Oman have surged from a mere 18,000 bpd in 2025-26 to over 100,000 bpd. Similarly, Venezuela has seen a massive jump in its exports to India, rising from 10,000 bpd to 258,000 bpd. The strong bilateral ties between India and the UAE, further emphasized by External Affairs Minister S. Jaishankar's recent visit following the ceasefire announcement, have played a crucial role. With the UAE now able to produce and sell oil independently, India stands to gain further.

US Stance and the Future of the Hormuz Strait

According to a report by the Wall Street Journal, citing White House sources, the Strait of Hormuz is expected to remain closed indefinitely. President Trump has reportedly directed Pentagon officials to strengthen the blockade of the outer Hormuz region to pressure Iran. Negotiations between the US and Iran remain deadlocked as the US has rejected Iran's new conditions. The Strait of Hormuz is a critical global artery, accounting for approximately 20 percent of the world's total oil supply, yet India's strategic shifts are minimizing the local impact.