The stillness of the fuel pump is different in Gandhidham's, as well as Guwahati's, stations from the smoke that rises over the Persian Gulf. After three months in a war that has effectively closed the Strait of Hormuz, the country that consumes about 88 per cent of the crude it burns is still standing and the numbers don't tell the full picture of how it is standing.

The latest Kpler shipping data, released out of New Delhi this morning, does not go unnoticed. In April, Indian refiners imported 4,57 million bpd, nearly the same amount as in March, but 15,5 per cent less than the same month last year. The only thing that got changed is the map. The crude which formerly passed through Hormuz on a 4-day trip from Basra or Kuwait is now coming from Maracaibo, Santos, Cabinda and Bonny, and these trips are not even recorded on a single Indian refiner's spreadsheet a year and half ago. Had the Israeli-American effort against Iran not started at the end of February, Venezuela would be India's fourth biggest crude supplier in May.

It is not improvisation. It is the cashing-in of a hedge a few individuals, outside the public glare of the news, had been preparing for the past two years in the boardrooms of ISPRL and other energy companies and it is a reflection of another truth about Indian energy policy that the news cycle seems to be oblivious of.

The numbers at the right and below the pivot

Imports from Iraq dropped to zero in the month of the outbreak of war and Basra exported none at all during the same period. Saudi imports, at approximately 619,700 barrels a day, were virtually unchanged, largely due to the presence of the East-West pipeline route to get crude past the Hormuz and offload at Yanbu on the Red Sea. UAE volumes, which had fallen to 230,600 bpd in March, bounced back to 669,700 bpd in April as Abu Dhabi started up its Habshan-Fujairah pipeline, the only Emirati artery to avoid the strait. The UAE's clean departure from OPEC in May will coincide with the removal of production quotas, which was a convenient move.

Russian crude, the main component of Indian imports for the past three months, actually declined by 29.4 per cent month-on-month to 1.6 million barrels a day largely due to the scheduled maintenance of Nayara Energy's 400,000-barrel Vadinar refinery. The Russian basket still had about 35 per cent. A year ago, Washington would have never have granted New Delhi a 30-day waiver under an OFAC licence to start lifting Russian oil already on board ships; in another step, the U.S. government too, in a curious manner, allowed a one-off Iranian shipment to land for the first time in seven years, ostensibly to keep Russian oil prices stable.

Brazil exported 293,000 bpd, double the 137,000 bpd in March. Nigerian shipments rose by 85 per cent to 231,000 barrels. Angola got in on the rotation. The Jamnagar complex of the offloading Reliance, which was virtually built to chew, rose to around 285,000 bpd (a multi-year high), with Reliance at 219,000 bpd and BPCL and HMEL at 66,000 each.

The OPEC crude oil contribution to India's oil imports surged to 45.2 per cent in April compared with 30 per cent in March, including the UAE in the last month of its association with OPEC. That is the biggest re-balancing of energy that has ever been seen in India in a single month.

The true expense which no one's discussing

Headline crude is a simple story. At the same time, Brent is hovering around $105 per barrel, after rallying to $114 in early May and then to surpass $108 last week when President Trump called Tehran's most recent peace initiative "totally unacceptable. Goldman Sachs says that if the Hormuz remains closed for a month, then Brent average prices will exceed $100 through 2026. The more pessimistic analysts, which come from two London houses, assign dated Brent at $154 if the disruption lasts for 12 weeks and it is more than $160 if the disruption extends over a much longer period.

However, the price of the bill on Indian refiners is not merely the screen price. A sticking-point of war-risk insurance which hovered at an idle 0.25 per cent of vessel value before February has surged to between 3 and 8 per cent. For a very large crude carrier costing $120 million, it's a line of $3 million to $8 million for one voyage, plus a base freight bill, typically $3 per barrel to $5 per barrel higher, and twelve days to sixteen days at sea, on a Cape-of-Good-Hope routing from West Africa or Latin America. The entire Arabian Gulf has been declared a war zone by Lloyd's Joint War Committee. The number of ships travelling through Hormuz is 95 per cent less than the pre-war average of 178 a day. There are about 40 long-range tankers that are stuck in the Gulf and there's no insurance company willing to take them.

In other words, all barrels of Venezuelan or Angolan crude that India burns are now costing 5-9 dollars more, landed, than the Saudi or Iraqi crude they've replaced. Even with a five dollar increase per barrel, this is an additional $685 million a month, or about $8 billion annualised, on the current account before refining margins are considered. Kotak Securities pegs India's Hormuz exposure between 50 and 55 per cent of crude and LNG imports, with strategic petroleum reserves accounting for only nine and a half days of demand and no sizable LPG stockpile to speak of.

Where India is, and where it isn't

The stockpile in the Indian Strategic Petroleum Reserve (ISPR) of 5.33 million tonnes plus the 64.5 days' worth of stock in the refiner tanks is approximately 74 days of cover for the country. The bar is set for 90 by the International Energy Agency. By contrast, the U.S. Strategic Petroleum Reserve is built to store 714 million barrels in salt caverns along the Gulf Coast and can actually destabilise prices when Washington wants to do just that.

This is the honest dialogue that India isn't doing loudly enough. The Minister of Petroleum has admitted that the country is "reworking strategic requirements. A parliamentary standing committee in March called for the 90-day deadline. The plans to expand the SPR at Chandikhol in Odisha and at Padur II in Karnataka are under consideration for a decade now as Phase-II. Part of the land has been acquired. Construction is not.

The root problem is structural and it's been Sumit Peer's message from TV panels for years: an import-dependent country can't continue to think of energy as a procurement issue. It's a sovereignty thing. Smart marketing to Latin America and Africa is good crisis management, but smartness runs out. All of the barrels India purchases today go by sea routes guarded by foreign navies, payed in foreign currencies not issued by India, backed by foreign insurance companies India can't control and at reduced price by political factors India can't predict. BPCL's last year contract with Brazilian Petrobras was only $390 million, and the volume was half that of the one signed last January. The re-engagement with Merey, Venezuela, by Reliance is opportunistic and classy but relies on a licensing regime, which turned on its head when Caracas changed hands and may turn back.

The next hedge to be built

There's a more subdued repertoire of moves that should come next. The first is filling the existing SPR to capacity; the latest release puts the caverns at 64 per cent full, and the second is the completion of Phase-II yesterday. The second is that ONGC Videsh has the mandate and not the political tailwind for locking long term equity stakes in Latin American and African upstream, not just the spot cargoes. The third is to treat the settlement experiments in rupees and rubles, and rupees and reals, seriously and not as curiosities. The fourth, and least glamorous and most consequential, is the slow grind of demand reduction, to be speeded by greater electrification of two-wheelers and city buses, by real biofuel blending beyond the symbolic E20 target, and by a coherent push on green hydrogen for refining itself.

The oil marketing companies have taken the brunt of the shock and the rupee is not moving, which is why the pump price is not moving; and the government has shown political wisdom in allowing the OMCs to absorb the shock. That is welcome. It's not a strategy.

Eventually, the Strait of Hormuz will open back up. The premiums for war will be reduced, sooner or later. In the comfort of New Delhi corridors, this episode is expected to pass and the old rhythms will resume. They will not. Insurance markets have permanently recalculated, freight has adjusted and Suppliers will become commercialized, rather than frightened. China is reading the same data also. That's the case with all of the refinery folks from Rotterdam to Mumbai.

India did not happen to come across Latin American and African crude. It walked there, intentionally, after years of warnings which were largely ignored. But now the question is, does the next walk, towards energy self-reliance, start when the smoke is still in the air, or will it only come after the next crisis, which will be less charitable.