The sharp surge in global crude prices amid escalating tensions involving Iran has renewed attention on India’s energy vulnerability, particularly in natural gas supplies, according to Kotak Institutional Equities’ Pratik Gupta.

Speaking after the brokerage’s annual investor conference, Gupta said that while India has a reasonable buffer of crude inventories, the country could be more exposed to disruptions in natural gas availability if geopolitical tensions persist.

“Oil-wise we might be okay because we have about 50 to 60 days of inventory,” Gupta said. “The bigger issue in the short term is natural gas where we have near-zero inventory.”

Global oil markets have turned volatile in recent days as the Iran conflict raises concerns over potential supply disruptions in the Middle East — a region that remains central to global energy flows and a key source of India’s imports.

Brent crude hit a peak of $120 per barrel last week before retreating to ~$107.80 amid de-escalation signals, but analysts warn of $150 if the war drags into Q2.

This is up ~30% from pre-conflict levels, amplifying India’s import bill (which was already ~$140 billion annually for crude).

Gupta noted that while crude supply disruptions can be managed in the near term because of existing inventories, the limited buffer in gas supplies could pose more immediate challenges for certain domestic industries if imports are affected.

“Industry is already facing constraints,” he said, adding that some gas-dependent sectors have begun feeling the strain. “The Morbi ceramics industry has cut production.”

Industries that rely heavily on natural gas (including ceramics and other manufacturing segments) could face pressure if supply constraints intensify, he suggested.

India imports the bulk of its energy requirements, making it sensitive to swings in global oil and gas markets. While crude inventories provide some short-term cushion, sustained disruptions in the region could still affect supply chains and energy costs.

India sources 50-60% of its LNG via Hormuz; analysts say disruptions could hit 80-85% of LPG shipments, with refiners holding just 25 days of gasoil inventory.

Gupta also said geopolitical developments in the Middle East have made global investors more cautious toward energy-importing economies.

“With the outbreak of the Iran conflict, the foreign investor mood has turned cautious again as India is vulnerable to disruptions in oil and gas supplies,” he said.

The developments come at a time when global markets are closely tracking energy supply risks from the region, with oil prices rising sharply as traders assess the potential impact of escalating tensions on global energy flows.
Source: MoneyControl