The Indian Ministry of External Affairs strongly condemned attacks on MT Petro Dolphin and MT Valthera, calling for a halt to all hostilities and safeguarding of civilian shipping. A drone was said to have hit the Nicaragua-registered Petro Dolphin at Oman's Sohar Anchorage. Eleven of its crew, nine Indians and two others, were rescued, with two still missing. The Indian crew of the Marshall Islands-flagged Valthera, which was hit by an unknown object that set afire one of the vessels, said they are all safe.

The Indian Embassy in Muscat has been liaising with the Omani authorities and the operators to carry out rescue operations. The attacks are especially concerning for New Delhi as they endanger Indian nationals who are employed in international shipping, a key component of the world's trade.

The threat is real and not theoretical. A drone attacked the Panama flagged tanker MT GEM No. 2 that was carrying 22 Indian seafarers near Sharjah Anchorage on October 9. All survived. So in the space of three days, three commercial ships with a total crew of 44 Indian nationals had been attacked. This series brings up uncomfortable questions regarding the effectiveness of current measures taken to ensure the security of the seas and the fact that commercial vessels are more and more being used as tools of geopolitical pressure.

The Strait of Hormuz is the link between the Persian Gulf and the Gulf of Oman and Arabian Sea. Prior to the current war, about 20% of all petroleum energy used in the world transited the narrow corridor. Gulf maritime infrastructure is vital for significant parts of Saudi Arabia, Iraq, the United Arab Emirates and Qatar's energy trade. As a result, a prolonged disturbance has an impact on individuals beyond those of regional exporters. It is delivered to refineries, airlines, manufacturers, transportation firms and homes in Asia and Europe.

The impact on the economy is already felt. Brent crude was reported at around $105.41, and U.S. West Texas Intermediate was at around $92.42 a barrel on Oct. 12. These costs are not just for supply but also to reflect the extra geopolitical risk premium for energy transport through the conflicted waters. Goldman Sachs has also upped its price forecast for December Brent to $90 per barrel, implying that higher prices might continue even as near-term tensions seem to ease.

A sustained high price hike can prove to be hazardous for India, which relies on imports for over 4/5 of its crude oil needs, as it will impact the cost of imported crude oil, the domestic inflation rate and the rupee. If the crude price rises by $10, on around 5 million barrels a day of imports, it is a $18 billion extra in the gross import spend each year before taking into account volumes of import, discounts and sourcing structures. These increases can have an impact on government finances, drive marketing margins, freight costs and cost of industrial production.

The shipping industry has an even more challenging computation. Under severe market conditions, very large crude carriers (VLCC) from the Gulf to China have been selling for around $1.6 million a day, according to the latest international reporting. The delivered cost of energy also includes insurance premiums and security expenses plus possible route disruptions. But, even if oil is physically available, the cost of getting it to a safe location can become too high.

The crisis has also highlighted the shortcomings of naval deterrence. The United States has been trying to safeguard the flow of shipping by sending military ships and planes to monitor it, but it is extremely hard to protect all shipping in the Gulf because of the geography of the area. The unmanned systems are relatively inexpensive, and can strike vessels valued in the millions, and cargo valued in the tens of millions.

On October 11, U.S. military officials announced that a Panama-flagged cargo ship trying to get through the Iran blockade in the Gulf of Oman had been disabled. The case shows how commercial shipping ships are getting entangled in military enforcement operations. Meanwhile, Iran's Revolutionary Guards have claimed control of Hormuz, while they've made individual claims to responsibility for recent attacks against tankers, which must be substantiated.

The other issue is the increased risk of liquefied natural gas supplies. The upheaval to Qatar's LNG industry has been severe and some 17% of the nation's LNG export capacity is said to have been destroyed. The estimates for September shipments were just 1/4 of the prewar levels. India depends on imported LNG for producing fertiliser and for infrastructure energy and CNG and a prolonged interruption could add to its oil market pressure.

The strategic repercussions have implications for China, Japan, South Korea and Europe. China needs reliable energy deliveries from the Gulf to fuel its industry and Japan and South Korea are highly dependent on imported hydrocarbons. Europe is already dealing with the effects of long-running energy insecurity, and is now confronted with additional competition for available LNG cargoes. While tighter supplies could benefit exporters in the United States in an economic sense, more exports will not replace the Gulf infrastructure damage in a timely fashion.

A deeper question in this case is also about Iran's strategy. Direct or indirect attacks on commercial shipping put economic pressure beyond the battlefield that is being fought in Iran. They increase the price of international participation, and the conviction of outsiders to ensure navigation. But until there is definite proof of who was responsible for the October 11 events it would be too soon to draw any conclusions.

The Indian response must be diplomatic, while at the same time being more operationally ready. New Delhi has significant ties to Iran, Israel and the United States and Gulf Arab countries. These ties are useful as a means of diplomacy but are not a substitute for maritime intelligence, emergency evacuation plans, shipping coordination and diversified energy sourcing.

India's freedom of navigation policy is thus more of an economic imperative than a diplomatic stance. The country has already also taken the first steps to join Liberia to promote an international program on commercial shipping and security of seafarers. Now it's time for the practical coordination of maritime authorities, shipowners, insurers and coastal governments.