Twelve Ships Burn at Hormuz; Where Is India's Energy Plan?

Record attacks, missing Indian seafarers, a weak rupee and thin reserves expose an energy policy built on hope.

On the night of 11 October, a tanker called Petro Dolphin was lying at anchor off Sohar, on the coast of Oman, when a drone hit it. Fire broke out. A video taken from a small boat nearby showed the vessel engulfed in flames. On board were 11 Indian seafarers. Nine were rescued. Two were missing. The Union Minister for Ports, Shipping and Waterways, Sarbananda Sonowal, confirmed it on the same day. By the time this article was written, the Ministry of External Affairs said efforts were continuing to find them.

That was one of six ships attacked in the Strait of Hormuz area on a single Sunday. Over the week from 5 to 11 October, the UK Maritime Trade Operations agency recorded 12 attacks on commercial vessels, the highest weekly total since the war between the United States, Israel and Iran began on 28 February. The week before had 10. Reports say 26 vessels have been struck so far this month, making October the most dangerous period for shipping during the war.

India imports roughly 85% of the crude oil it uses. A large share of its oil, gas and fertiliser inputs comes from the Gulf. Its seafarers crew a large number of ships on these waters. If any country in the world has a direct, daily, human and economic stake in what happens at Hormuz, it is India.

So it is fair to ask a simple question. After more than seven months of war, with the strait under attack, with Indian sailors dead and missing, with the rupee near its record low and fuel prices rising, where is the government's plan? Not its statements of concern, of which there have been many, but its plan.

What is happening at Hormuz

The numbers show a situation that is getting worse, not better.

UKMTO recorded 12 attacks between 5 and 11 October. On 11 October alone, six commercial vessels were hit, five tankers and a container ship, in the Strait of Hormuz and near Sohar. The attacks have moved further from the strait. A tanker was hit north of Qatar on 8 October, with several casualties. Another was attacked off the UAE coast on 9 October. Several ships have sunk, including the Singapore-flagged container ship GFS Pride, reportedly after hitting a mine or a projectile.

Traffic has dropped. Reported shipping figures put about 12.6 million barrels a day passed through the strait on 13 October, down from about 15 million at the end of September. That is a fall of around 16% in two weeks. Shipping data this week showed the number of vessels transiting Hormuz at its lowest in more than two months. The US Navy says it has assisted 85% more vessels through the strait in the first ten days of October than in the same period in August. That figure shows both how much the US is doing to keep the strait open and how dangerous the transit has become, since ships now need help to pass.

The threat is assessed as severe by the Joint Maritime Information Center. Iranian forces have been using drones, surveillance and radio challenges against merchant ships. The US Central Command says shipping continues under a coordinated defence. Both statements can be true: ships are moving, and ships are being hit.

Brent crude has been near $100 a barrel for weeks. The price has been on a roller-coaster since the war began, from a peak near $118 in late March to about $70 in July and back above $100. Diesel is hit hardest. Diesel prices have shot up almost 70% since the war began, by widely cited market figures. US diesel stocks reached a record low of 107.9 million barrels in September. The International Energy Agency says observed global oil stocks at the end of September were 509 million barrels below their pre-war levels.

The world has already burned through hundreds of millions of barrels of its emergency stocks. The cushion that protected us in March is thin in October.

The world's emergency stock is draining

The release of strategic reserves tells the story of how long this has lasted.

In March, the IEA's members agreed to release 400 million barrels from their emergency reserves, the largest release in the agency's history and more than double the 182.7 million released after Russia invaded Ukraine in 2022. By 16 October, about 330 million barrels had been released. On 2 October, the G7 agreed to release a further 100 million barrels of oil and diesel over four months, with diesel frontloaded. The IEA has now agreed to accelerate about 100 million barrels, including more than 20 million barrels of diesel. The final total of the March release is expected to exceed 400 million barrels, because some countries have released more than they pledged.

Analysts have called the March release a short-term bridge that covers only a few weeks of lost supply. It has now been used for more than seven months of disruption. Reserves cannot reopen the strait. They can only slow the damage while governments find a solution.

This is the context in which India's position has to be judged. The most powerful buyers in the world are drawing down their reserves. India is not a member of the IEA, although it is an association country, and its reserves are smaller.

India's reserves: what is known and what is not

Here the public has the least information, which is itself a problem.

India's strategic petroleum reserves are held in underground rock caverns at three coastal sites. Public estimates in recent years have put their capacity at about 5.33 million tonnes of crude oil, which is generally described as roughly nine to ten days of the country's crude demand. IEA member countries, by contrast, are expected to hold the equivalent of 90 days of net imports. We would like to be able to give the exact present fill level of India's reserves, and how it has changed during the war. We cannot, because the government does not publish it regularly.

In March, as the strait closed, the government told the public that all refineries were operating at high capacity with adequate crude inventories. The Ministry of Petroleum said sufficient stocks of petrol and diesel were maintained. That was reassurance. It was not data. The public was told that stocks were adequate but not how many days they covered.

Seven months later, the question has only grown. How much crude does India hold in its strategic reserves today? How much have commercial refiners stored? How many days of diesel and LPG are in stock? How much would it cost to build more storage, and when will it be done? None of these has a clear public answer.

India has tried to diversify. It has increased purchases from several suppliers and, with US permission in March, bought stranded Russian oil under temporary waivers. But waivers are not policy. A waiver can be withdrawn. In October, the US eased sanctions on Russian diesel for six months and then, on 16 October, Trump signed an order waiving new Russia sanctions that Congress had passed. India's access to certain supplies depends on decisions made in Washington, which can change with an election.

The seafarers

The human cost has been paid in large part by Indian families. This should have been the first thing the government talked about, and in some ways it has been. But the record deserves a clear look.

In March, as the war began, the government said that six Indian nationals had lost their lives and one remained missing in separate incidents across the Gulf region. By 4 April, the Directorate General of Shipping said it had helped repatriate over 1,130 Indian seafarers. It said 17 Indian-flagged vessels with more than 400 seafarers remained in the western Persian Gulf region. A control room has been working around the clock, and it had handled thousands of calls.

Those are real efforts, and they should be acknowledged. But the October attacks show that the risk has not gone. On 6 October, a vessel called MT On Peace was struck by a projectile while transiting Hormuz. It had 17 Indian nationals among its crew, and 12 crew members, including 11 Indians, were injured. On 11 October, the Petro Dolphin was hit, leaving two Indians missing. The same day, another ship, the Marshall Islands-flagged MT Valthera, was attacked, and its 11 Indian crew were reported safe. Reports from other incidents mention a vessel with 22 Indian crew who were safe.

Notice something about these vessels. Petro Dolphin flies the flag of Nicaragua. Valthera flies the flag of the Marshall Islands. Many ships that carry Indian crew are registered in countries that have little regulatory contact with India. That means India cannot control the safety rules, the insurance or the routing of those ships, even though the people on board are Indian citizens.

India supplies a large share of the world's seafarers. The government should be able to tell the public how many Indian seafarers are currently working on ships in or near the Gulf, on which flags, and under what safety arrangements. It should say what compensation and insurance cover the families of those killed or missing, and how quickly it is paid. It should say whether it is advising seafarers to refuse to sail through Hormuz, and whether they have the right to refuse without losing their jobs.

The Ministry of External Affairs has condemned each attack and called for de-escalation. Those statements are right, and necessary. But a statement is not protection.

The rupee and the bill

The oil shock is not just a story about ships. It shows up in the household budget, in the exchange rate and in interest rates.

The rupee is close to its record low of 96.96 to the dollar, down about 7% this year and the worst performer in Asia. India's current account deficit in the April–June quarter was $4.2 billion, or 0.5% of GDP, after a surplus the quarter before. The goods trade deficit widened to $86.1 billion from $68.9 billion a year earlier. Foreign portfolio investors have pulled a record $24.7 billion out of Indian equities this year. The gap between India's 10-year bond yield and the US 10-year yield has narrowed to about 194 basis points, the smallest in about 22 years.

At home, retail inflation was 5.54% in September, food inflation 7.74%. On 1 October, commercial LPG cylinders rose ₹62.50 and aviation fuel about ₹16 a litre. The RBI raised its repo rate to 5.50% on 7 October, the first increase in nearly four years, partly because of oil.

Oil is not the only cause of these problems, but it is a big one. Every extra dollar on the price of crude adds to India's import bill, weakens the rupee and pushes up prices. The government has said little about how long it can bear this or what it will do if Brent stays near $100 through the winter.

The Rubio visit and the question of dependence

On 21 October, US Secretary of State Marco Rubio visited Reliance Industries' Jamnagar complex in Gujarat, the largest single-site refinery in the world, with a capacity of about 1.4 million barrels a day. The day before, in Mumbai, he had called India a "refining superpower" and told reporters, "We will talk with Reliance about refining more Venezuelan crude." In an interview with a channel owned by Reliance, he said Washington wants to work more closely with Reliance on refining energy from the Western Hemisphere. He said Reliance has "extraordinary" refining capacity and noted that Reliance had invested in increasing refining capacity within the United States. Shipping analysts estimate that Reliance will account for roughly 350,000 to 370,000 barrels a day of the October intake of Venezuelan crude. The visit comes as rising US diesel prices create pressure ahead of the American midterm elections.

There is nothing wrong with India and the US cooperating on energy. India needs oil from somewhere, and Venezuelan crude is one option. But the public has a right to ask about the terms.

Who decides which crude India's refiners buy, and for what price? What commitments, if any, did India make during the visit on supply of refined products such as diesel to the US, where diesel is at a record low? If Reliance exports more diesel at a time of tight supplies, what does it mean for prices inside India? And who benefits from the arrangement: the public, or one company?

These questions are not an accusation. They are the sort of questions that any democracy asks when a foreign government's most senior diplomat tours the facility of a private company and speaks of working together on supplies in a crisis. The government should tell Parliament what was agreed, and what was not.

What a real plan would contain

Governments cannot stop a war. But they can reduce the damage it does. That is what an energy plan is for. Here is what India's should contain.

1. Publish reserve data. Release, every month, the fill level of the strategic reserves in barrels and in days of demand, and the stocks of diesel, petrol, LPG and aviation fuel held by the state and by refiners. 2. Build more storage, with dates. Announce the next phase of strategic reserve capacity, with locations, costs, a financing plan and a completion date, and fill it when prices dip, not when they spike. 3. Diversify supply, openly. Publish the share of imports coming from each source and route, and a target to reduce dependence on any single chokepoint or any single country's waiver. 4. Protect seafarers. Publish the number of Indian seafarers working in the region, on which flags. Require shipping agents to report Indian crews on high-risk voyages. Guarantee the right to refuse unsafe voyages without penalty and set a fast, fixed compensation scheme for families of those killed or missing. 5. Account for the missing. Give the public a regular update on the two missing sailors from the Petro Dolphin and the other cases, and the steps taken to find them. 6. Shield the poor. Set aside funding to protect low-income households from LPG and diesel price spikes, targeted to those who need it, and publish how it will work. 7. Speed up alternatives. Set time-bound targets for public transport, freight by rail, electric vehicles and domestic gas, with funding, so the link between daily life and global oil falls over time. 8. Make the US relationship transparent. Tell Parliament what India has agreed on Venezuelan crude, Russian oil waivers and refined product supplies, and publish the key terms. 9. Brief Parliament. Hold a full debate on the West Asia war's effect on India, with ministers present, and not leave it to press statements.

An energy plan that cannot be shown to the public is not a plan. It is a hope.

The government's case

The government has a case, and it should be heard.

It would say that India has so far kept supplies flowing. There has been no shortage at the pumps, refineries have run at high capacity, and the country has found oil from several sources. It would say it has acted to protect seafarers, with a control room, repatriation flights and strong statements at the highest level. It would say that its diplomacy has been careful: India has called for de-escalation and talks with all sides, and the Prime Minister has spoken to leaders across the region.

It would also say that nobody could have prepared fully for a war that closed the Strait of Hormuz, and that no country has done better.

All of this is partly true. India has not run out of fuel. That is a real achievement, and the refiners and officials who kept supplies moving deserve credit. But the question is not whether India has coped so far. It is whether it is ready for a long war, with a strait that is getting more dangerous by the week, an emergency stock that is draining, and a currency under pressure. For that question, the answer is not in the government's statements. It is in the data that the government does not publish.

What to watch

In the coming weeks, several signals will show where this is going.

Watch the weekly attack count and the daily flow through Hormuz. A third week above ten attacks, with flows falling below 12 million barrels a day, would signal a sharp deterioration.

Watch the US diplomatic track. President Trump has said the US will not attack Iran before the 3 November midterms, but the Pentagon has prepared strike options, including the largest non-nuclear bomb in its arsenal, and some operations may resume after the vote. If they do, the strait could become even more dangerous.

Watch the rupee and the RBI. If the rupee breaks through its record low, imported inflation will rise further, and the RBI may be forced to raise rates again.

Watch the fate of the two missing seafarers and the safety of the Indian crews who are still at sea. They are the human measure of whatever the government says.

The bottom line

A country that imports most of its oil, depends on a narrow strait for much of it, and sends a large share of the world's seafarers to sea cannot afford an energy policy based on assurance. After seven months of war, the strait is more dangerous than at any time. Ships are burning. Indian sailors are missing. The rupee is near its lowest. Prices are rising.

The government's answer so far has been to say that things are under control. The public deserves more: the numbers on reserves, the plan for the winter, the terms of the deals with Washington and the facts about every Indian life at risk. Hope is not a strategy. A plan has dates, figures and names. India has the means to produce one. It should do so before the next ship burns.