Iran-Israel war: Alternative routes, detached from the geopolitically sensitive Strait of Hormuz, have become crucial following renewed threats from Iran to disrupt maritime traffic.

India’s Finance Ministry is closely tracking the macroeconomic impact of rising crude oil prices amid escalating tensions in West Asia. According to ministry sources, officials are in regular discussions with the Oil Ministry, which is working to secure alternative import routes and ensure uninterrupted fuel supplies.

Oil Minister Hardeep Singh Puri stated that India has sufficient reserves to meet demand for several weeks and continues to receive energy shipments through diversified channels. “Under Prime Minister Modi’s leadership, we have significantly reduced our dependence on the Strait of Hormuz,” he said, citing increased imports from Russia, the US, and Brazil.

These alternative routes, detached from the geopolitically sensitive Strait, have become crucial following renewed threats from Iran to disrupt maritime traffic. “Our oil marketing companies are well-stocked and continue to receive supplies. We will take all necessary steps to ensure stability,” Puri added.

However, the sharp rise in crude prices is adding pressure on the Indian rupee. The currency has weakened from INR 86.58 to around INR 86.80–86.90 per U.S. dollar, its lowest level in over two months. Non-deliverable forwards indicate expectations of further depreciation.

Brent crude briefly touched USD 81.40 per barrel, triggering a global risk-off sentiment. The demand for safe-haven assets like the dollar has risen, putting emerging market currencies, including the rupee, on the back foot.

If volatility worsens, the RBI may step in to smooth fluctuations and maintain currency stability, as it has done in similar situations in the past. While short-term pressures persist, analysts believe rupee stability could return if oil prices cool and foreign portfolio flows resume.

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