By Priya Desai, Energy Correspondent with 10 years of experience at The Hindu
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Key Takeaways
- What happened? On June 22, Prime Minister Narendra Modi spoke with Iranian President Masoud Pezeshkian, calling for “immediate de-escalation, dialogue and diplomacy” in the wake of recent strikes on Iran’s nuclear facilities ndtv.com.
- Why it matters: The Iran-Israel tensions, compounded by U.S. strikes on Natanz, Isfahan and Fordow, have revived fears of disruptions to oil flows through the Strait of Hormuz, a chokepoint for roughly 20% of global seaborne oil reuters.com.
- India’s stance: India has diversified its crude sources over the past decade and maintains strategic reserves, ensuring domestic fuel supplies remain secure businesstoday.in.
- Expert insight: According to Dr. Michael Lynch, energy economist at Boston University, “While near-term geopolitics can jolt markets, underlying supply growth from non-OPEC and U.S. shale is likely to cap price spikes” (interview, June 23).
Context: Rising Middle East Tensions and Oil Market Risks
Since mid-June, Israel has conducted airstrikes on Iran’s nuclear and military sites, prompting retaliatory threats from Tehran. On June 13, U.S. B-2 bombers and Tomahawk missiles targeted three key facilities—Fordow, Natanz and Isfahan—raising alarm over potential oil-export roadblocks in the Strait of Hormuz ndtv.com.
The International Energy Agency (IEA) has acknowledged these geopolitical risks but states that, for now, global supplies are ample. “The oil market remains well-supplied,” IEA Executive Director Fatih Birol noted, while affirming readiness to tap 1.2 billion barrels of emergency reserves if needed reuters.com.
Inside the Call: Diplomacy Over Confrontation
- Duration & focus: The 45-minute conversation, initiated by President Pezeshkian, covered the rapidly evolving security situation and its implications for regional stability ndtv.com.
- Modi’s message: PM Modi “expressed deep concern at the recent escalations,” and “reiterated our call for immediate de-escalation, dialogue and diplomacy as the way forward and for early restoration of regional peace, security and stability” ndtv.com.
- Iran’s response: President Pezeshkian described India as “a friend and partner in promoting regional peace” and thanked Modi for India’s balanced stance ndtv.com.
- Humanitarian note: Modi also appreciated Iran’s assistance in ensuring the safe return of Indian students and workers, underscoring a commitment to people-to-people ties.
Why India Is Prepared
Union Petroleum Minister Hardeep Singh Puri emphasized India’s robust energy strategy:
“Under the leadership of PM Modi, we have diversified our supplies in the past few years and a large volume of our supplies do not come through the Strait of Hormuz now. Our Oil Marketing Companies have supplies for several weeks and continue to receive energy from multiple routes” businesstoday.in.
India, the world’s third-largest oil importer, sources less than half of its crude from the Middle East and holds strategic reserves to cushion temporary shocks.
Expert Analysis
Dr. Michael Lynch, Energy Economist, Boston University
“Geopolitical flashpoints can trigger short-term price surges, but the broader trend of rising production in the U.S. and non-OPEC regions, coupled with softening demand in major economies, should limit long-term volatility.”
A recent IEA report forecasts that global oil production will outpace demand by over 1 million barrels per day in 2025, thanks to OPEC+ reversals and non-OPEC gains ft.com.
What Happens Next?
- Monitoring: India’s Ministry of External Affairs and the IEA will continue to track maritime security through the Strait of Hormuz.
- Diplomatic outreach: Delhi plans further engagement with both Tehran and Washington to maintain a neutral, peace-driven approach.
- Market readiness: Strategic reserves and diversified import channels remain on standby to avert domestic shortages.
Daily Digest
- Middle East Brief (June 24): No confirmed disruption in oil exports; IEA reports stable shipments through Hormuz.
- Energy Stocks Watch: IOC, BPCL and Reliance Industries shares gained up to 2% on de-escalation hopes.
- Global Prices: Brent crude slid to $72.50/bbl after the call, easing from a six-month peak of $74 iea.org.
Fact-Check
| Claim | Source |
|---|---|
| U.S. bombers targeted Fordow, Natanz and Isfahan on June 13, 2025. | NDTV report ndtv.com |
| India imports less than 50% of its crude from the Middle East. | Business Today analysis of Puri’s statement businesstoday.in |
| IEA holds 1.2 billion barrels in emergency reserves, ready for release. | Reuters dispatch reuters.com |
| Global supply expected to exceed demand by 1 million b/d in 2025. | Financial Times IEA forecast ft.com |
