Hormuz Blockade Threatens to Extend Energy Delivery Times for India

India Vulnerable to Strait of Hormuz Disruptions

India may have to scramble for alternative oil and gas supplies if the US continues its blockade of the Strait of Hormuz, forcing buyers to turn to distant producers and significantly increasing shipment times. The country is particularly exposed to disruptions in the Strait of Hormuz, a key maritime chokepoint for global energy trade.

Cargoes from the Gulf typically reach India quickly, around 4-5 days based on a Moneycontrol analysis. The analysis assumes an average speed of 12 knots for a Very Large Crude Carrier and calculates time based on the CERDI Database. It does not include refuelling or stops, which could further extend the time.

| Destination | Average Sailing Time (Days) | | --- | --- | | Australia | 20 days | | West Africa (Nigeria) | 19-20 days | | US | 35 days |

Replacing these supplies with cargoes from alternative exporters would significantly extend transit times. Shipments from the US would be the slowest, taking roughly 35 days to reach India. Cargoes from Nigeria typically require 18-24 days, with an average sailing time of around 19-20 days via the Cape of Good Hope.

The price at which India procures the products may also increase, as India competes with Europe and China. Brent crude traded above $100 on April 13, as ceasefire talks failed and the US threatened a naval blockade. The price of the Indian crude Oil Indian Basket was $116.26/bbl on April 10.

Longer voyages would increase freight costs and could force Asian buyers to pay higher premiums to divert cargoes away from Europe. Recent shipping disruptions elsewhere show how quickly logistics costs can rise. According to ICRA, rerouting vessels between Europe and Asia via the Cape of Good Hope instead of the Suez Canal adds 10-15 days to transit times, while war-risk insurance premiums have climbed to 0.75-1 percent of a vessel’s insured value from around 0.5 percent earlier.