After facing months of disruptions in supply and rising energy prices due to ongoing global conflicts, India is presented with a significant opportunity. Known as one of the largest importers of oil and gas worldwide, India was on the brink of a critical shortage with only nine to 10 days’ worth of oil reserves left. In comparison, countries like Japan and South Korea, also dependent on Persian Gulf imports, had reserves lasting about 200 days.

A recent report by the Council on Energy, Environment and Water based in New Delhi highlighted these issues. The possible lifting of restrictions on Iranian oil exports due to a preliminary deal between the United States and Iran offers a potential solution. The prospect of reopening the Strait of Hormuz could provide much-needed relief for India and other nations.

India’s economy, frequently recognized as the fastest-growing among major countries, has faced increasing challenges since the war’s onset. Prime Minister Narendra Modi’s administration has warned of impending difficulties, leading to higher fuel prices and tighter controls on overseas expenditure. These issues have affected households as well as industrial operations within the country.

Iran was once a crucial energy supplier for India. In 2009, Iranian oil formed 14% of India’s crude imports. However, by 2019, due to U.S. sanctions during President Trump’s tenure, India ceased importing Iranian oil.

In the face of the current supply crunch, India is compelled to purchase oil from any available source. “We will take the cheapest barrel available, whether it is Russian or Iranian,” said Rajeev Lala, a director at S&P Global Energy in Gurgaon, India. He emphasized India’s unique capability to take advantage of the potential return of Iranian crude.

India’s decision to reestablish energy ties with Iran could play a crucial role in stabilizing its energy supplies and mitigating the current crisis.