India and other key Asian oil importers may circumvent multilateral deadlock and strike direct deals with Iran on energy shipping corridors. Moody’s Ratings said in a global geopolitical risk report that a full, generalized reopening of the Strait of Hormuz is highly unlikely in 2026 as the diplomatic impasse between the United States and Tehran continues. Critical energy-importing economies namely China, India, Japan and South Korea will likely use bilateral diplomacy to forge very targeted, coordinated transit routes. The likely potential passages open from within Omani territorial waters and near Larak Island, providing a guarded, alternative channel for key fuel imports.
The ongoing disruption of the Strait of Hormuz, where maritime traffic has collapsed by more than 90% due to sea mines and soaring insurance costs, has turned from a temporary shock into a structural supply constraint. Even if safe passage technically resumes in the next six months, the global energy market will stay severely constrained. Brent crude prices will be between $90 and $110 a barrel for most of the year, a situation that will boost global inflation and put pressure on central banks, Moody’s says.
India is especially vulnerable to this crisis as it sources around 46% of its crude oil imports from the Middle East apart from the majority of its LPG and LNG demands. The fiscal stress and currency depreciation thereafter pushed Moody’s to cut its 2026 GDP growth forecast for India by 0.8 percentage points to 6%. New Delhi has already invoked emergency commodity laws and raised retail fuel prices in the face of these prolonged supply tensions, citing the absolute need to secure bilateral transit pacts with Iran to stabilise domestic energy security.
