Explained: Why Iran's Ceasefire Defiance Raises Energy Security Concerns For India
With Iran resisting ceasefire pressure, India confronts growing energy security concerns as tensions around the Strait of Hormuz threaten vital crude import routes.
Published : March 10, 2026 at 8:48 PM IST
|Updated : March 11, 2026 at 9:19 AM IST
New Delhi: Iran's refusal to accept ceasefire proposals in the escalating conflict with the US and Israel is emerging as a major concern for India, whose economy remains heavily dependent on energy imports from the Gulf.
With a large share of India's crude supplies passing through the strategically sensitive Strait of Hormuz, where Iran holds significant influence, fears are mounting that a prolonged conflict could disrupt energy flows and trigger domestic supply shocks.
Iran's Deputy Foreign Minister Kazem Gharibabadi said late Monday that several countries, including China, Russia, and France, have contacted Tehran about a possible ceasefire.
"Our first condition for a ceasefire is that the aggression must not be repeated," Iran’s ISNA news agency quoted Gharibabadi as saying. Regional escalation has intensified since Israel and the US launched a joint attack on Iran on February 28, 2026, killing over 1,200 people, including Supreme Leader Ayatollah Ali Khamenei. Iran has retaliated with drone and missile strikes targeting Israel, Jordan, Iraq and Gulf countries that are home to US military assets.
Iran’s refusal to go for a ceasefire comes after Ayatollah Ali Khamenei’s son, Mojtaba Khamenei, was appointed Monday as the country’s new Supreme Leader.
India imports over 80 per cent of its crude oil requirements, and a large portion of these supplies originates from Gulf countries such as Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq. Most of this oil is transported through the Strait of Hormuz.
Tehran’s reluctance to heed ceasefire calls is beginning to ripple into India, exposing the country's vulnerability to geopolitical disruptions in West Asia. Reports of liquid petroleum gas (LPG) cylinder shortages and service disruptions in hotels and restaurants in cities such as Mumbai and Bengaluru have raised concerns about the stability of energy supplies.
Meanwhile, according to reports, Prime Minister Narendra Modi held a high-level meeting with Petroleum Minister Hardeep Singh Puri and External Affairs Minister S Jaishankar in Parliament here on Tuesday.
Reports also suggest that the government is prioritising domestic cooking gas to protect voters and general households. Consequently, the commercial sector, which relies on market-priced cylinders, is facing a severe supply crunch.
"In light of current geopolitical disruptions affecting global fuel supply, steps have been taken to enhance LPG production and prioritise its availability for domestic consumers and essential non-domestic sectors such as hospitals and educational institutions," public sector oil company Hindustan Petroleum Corporation Limited (HPCL) posted on its X handle. "Requests from other non-domestic sectors will be reviewed by a committee of executive directors from oil marketing companies and prioritised based on merit, necessity, and product availability."
LPG is widely used in Indian households and in commercial kitchens in the hospitality sector. Any supply disruption or panic buying can quickly strain distribution networks. While the current shortages may be temporary or localised, they underscore the sensitivity of India's energy supply chain to developments in the Gulf region.
Meanwhile, the IANS news agency, citing government sources, reported that India's oil refineries have increased LPG production by about 10 per cent following directions from the Centre. According to sources, the government has also increased the waiting period for new LPG cylinder bookings from 21 days to 25 days to curb malpractices and prevent misuse of domestic LPG supplies.
"The government has invoked the Essential Commodities Act to monitor the situation and ensure proper distribution of LPG," one government source was quoted as saying. However, the sources emphasised that the Essential Services Maintenance Act has not been invoked, according to the report.
A prolonged conflict involving Iran could trigger a sustained rise in global crude prices. This would have multiple economic consequences for India. Rising crude prices would significantly increase India's expenditure on oil imports. Costlier fuel would raise transportation and logistics costs, pushing up prices across sectors. Increased energy imports could widen the trade deficit. Sectors like aviation, transport, manufacturing, and hospitality would likely face immediate cost pressures if energy prices remain elevated.
The crisis also places India in a delicate diplomatic position. India maintains close relations with multiple actors involved in or affected by the conflict, including Israel, Iran, and the Gulf Cooperation Council (GCC) countries.
This year, India also holds the BRICS chairmanship (Brazil, Russia, India, China, South Africa), which has expanded to include Iran. Tehran’s membership means the issue could indirectly feature in discussions within the bloc, particularly in the context of global economic stability and energy security.
India may therefore have to balance its diplomatic engagements carefully – supporting international efforts for de-escalation while maintaining its strategic partnerships across the region.
Harsh V Pant, Professor of International Relations with King's India Institute at King’s College London and Vice-President (Studies and Foreign Policy) at the Observer Research Foundation think tank, expressed the view that for Iran, it is a question of survival.
"They have decided to dig in their heels," Pant told ETV Bharat. "They have announced a new Supreme Leader, and their message is that the regime is not going anywhere."
He said Iran is in no mood to yield; that is their domestic calculation. "Their calculation is also that the US will be under pressure to end the war," Pant said. "Energy disruption is a part of this calculation."
Regarding energy security challenges India may face, he said there may not be an immediate increase in oil prices, but LPG supply will be an issue.
On the issue of India’s chairship of BRICS, Pant was of the view that for New Delhi, the sooner the war ends, the better it will be to play its role in the bloc.
"The US would not like India to host Iran in the BRICS proceedings," he said. “This will be a diplomatic challenge.”
According to Robinder Sachdev, a strategic affairs expert and president of the New Delhi-based Imagindia think tank, the reason Iran is not pursuing a ceasefire is obvious.
"The offer has to come from the US," Sachdev said. "In the current scenario, Russia, China and France are peripheral players. The appeal for a ceasefire should be made to both sides. An appeal to only one side to go for a ceasefire is a non-starter."
Regarding India's energy supply concerns, he said India consumes 90,000 tonnes of LPG daily. "Of this, only one-third is produced in India," Sachdev said.
"Of the rest, 60,000 tonnes, most come from Qatar. Given the situation in West Asia, India will have to seek LPG from other sources at a higher price."
Regarding India’s position as BRICS chair vis-à-vis Iran, he said it is too early to make any predictions. "BRICS should call upon both the US and Iran for a ceasefire," Sachdev said. “What kind of statement BRICS comes out with, if at all, is a factor here."
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