EP.2 – The Global High Tea Series | Energy Disruptions in West Asia & Their Economic Implications for India

Introduction

The ongoing conflict in the Middle East has triggered not just a regional crisis but a global economic and energy shock. Disruptions to critical energy routes, especially the Strait of Hormuz, have tightened global oil and gas supplies, driving price volatility, inflationary pressures, and financial uncertainty. For energy-exporting GCC states, the conflict brings both windfall revenues and heightened security risks, while for energy-importing economies like India, it poses serious challenges to growth, trade balances, and energy security.

This crisis is a powerful reminder of how deeply interconnected the global economy is. Disruptions in energy supply chains, especially through critical chokepoints like the Strait of Hormuz, create ripple effects that reach far beyond the immediate theatre of conflict, touching households, industries, governments, and financial markets across the world. The crisis highlights the deep interdependence between geopolitics, energy markets, and economic stability.

This webinar examines the full scope of the economic and energy dimensions of this evolving crisis, spanning global energy supply disruptions, the paradoxical position of GCC economies, India’s compounded macroeconomic vulnerabilities, inflationary spillovers, supply chain fragilities, financial market volatility, and the broader risks of stagflation and what these mean for policymakers, businesses, and citizens across the region and beyond.

Key Takeaways

1. Maritime Chokepoints are the Backbone of Global Energy Security

The discussion highlighted how disruptions in critical maritime routes such as the Strait of Hormuz can trigger global economic instability. Since a major share of global oil and LNG passes through these waters, even temporary disruptions create supply uncertainty, price spikes, and financial volatility across international markets.

2. Energy Crises Create Cascading Economic Effects

The speakers emphasized that energy shocks are not confined to fuel markets alone. Rising oil and gas prices increase shipping costs, insurance premiums, fertilizer prices, food costs, and industrial production expenses, eventually translating into broader inflation and higher living costs for ordinary citizens.

3. GCC Economies Face a “Revenue vs Stability” Dilemma

While higher oil prices have temporarily strengthened the fiscal position of Gulf Cooperation Council economies, geopolitical instability threatens investor confidence, logistics networks, and diversification ambitions. Gulf economies are increasingly shifting from oil dependence toward technology, renewables, services, logistics, and manufacturing to build long-term resilience.

4. India’s Energy Security Model Remains Highly Vulnerable

India’s heavy dependence on imported crude oil and natural gas makes it extremely exposed to external geopolitical shocks. The webinar noted that rising oil prices widen trade deficits, increase inflation, strain fiscal balances, and challenge India’s ambition of sustaining high economic growth while maintaining strategic autonomy.

5. Strategic Petroleum Reserves and Energy Transition Need Urgent Attention

One major concern raised was India’s limited strategic petroleum reserves, which can sustain only a short period of imports during severe disruptions. The speakers stressed the need for faster diversification into renewables, freight electrification, alternative fuels, and stronger domestic energy infrastructure to reduce long-term dependence on volatile external markets.

6. Global Trade and Supply Chains are Being Restructured

Shipping rerouting away from conflict-prone regions has increased transit time, freight costs, and logistical uncertainty. However, the crisis may also accelerate the emergence of more resilient supply chain models, including multi-port systems, alternative trade corridors, and diversified logistics partnerships across regions.

7. Financial Markets are Moving from “Efficiency” to “Resilience”

The webinar highlighted how geopolitical crises trigger a “flight to safety,” with investors moving toward assets such as the US dollar and gold. Emerging economies like India face capital outflows, currency pressure, and tighter financial conditions. At the same time, India’s long-term investment attractiveness remains relatively strong due to manufacturing growth and domestic market resilience.

8. Energy Security is Becoming a Strategic and Geopolitical Priority

The discussion concluded that the world is shifting from an era focused mainly on energy transition and efficiency toward one prioritizing energy security and resilience. Countries are increasingly investing in strategic stockpiling, regional energy corridors, domestic manufacturing capacity, and mini-lateral partnerships to protect themselves against future geopolitical and supply chain shocks.

Speakers

Dr Pooja Bhatt

Associate Professor, Jindal School of International Affairs, JGU, 

Research Fellow (Maritime Studies), Centre for Public Policy Research, Kochi

Dr Pooja Bhatt is an Associate Professor at Jindal School of International Affairs, specialising in Maritime Geopolitics, Indian Foreign Policy, and National Security. She is also the South Asia Visiting Fellow 2025 at the Henry J. Stimson Centre. Dr Bhatt authored the book Nine-Dash Line: Deciphering the South China Sea Conundrum and contributed to the Indian Navy’s history volume A Decade of Transformation: The Indian Navy 2011–21.

Her research focuses on the Indo-Pacific, South China Sea, defence, and Asian security architecture, with publications in international journals and policy platforms. She has also worked with India’s Ministry of External Affairs and leading think tanks, including the Centre for Air Power Studies and the Indian Council of World Affairs. Dr Bhatt earned her PhD in International Studies from Jawaharlal Nehru University in 2021.

Dr. Gayathry Gopal

Assistant Professor at Government Arts and Science College, Tavanur, Kerala

Research Scholar (South Asian Geopolitics & Maritime Diplomacy), Centre for Public Policy Research, Kochi

Dr Dhritishree Bordalai

Senior Research Associate – International Relations, CPPR

Dr Dhritishree Bordalai holds a PhD from the Centre for European Studies (CES), School of International Studies (SIS), Jawaharlal Nehru University (JNU), New Delhi. She has a Certificate in Public Policy and Management from the Indian Institute of Management, Kozhikode (IIM-K), and has been awarded the UGC-DAAD Short-Term Scholarship during her PhD at the Otto-Suhr-Institut für Politikwissenschaft (OSI), Freie Universität Berlin, Germany.

She has attended several national and international conferences on her area of research and presented a paper at the Young Researchers Conference in JNU. Her core areas of research are migration, security and refugee studies.

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