Is the Government Prepared for an Oil Shock? Or Are We Sleepwalking Into a Crisis?

Date: 03-04-2026

There is a growing, uncomfortable question that policymakers seem reluctant to answer: Is India prepared for a prolonged oil crisis?

The signals are not encouraging.

What we are witnessing globally is not a short-term disruption. The Iran conflict is already pushing oil prices upward and disrupting critical supply routes like the Strait of Hormuz, through which around 20% -27% of global oil flows. Markets are reacting sharply, and volatility suggests fear of a sustained supply shock—not a temporary spike.

And here is the uncomfortable reality:

This conflict may not end anytime soon.

Despite repeated claims of quick resolution, the situation on the ground shows continued escalation, with rising oil prices and no clear plan to stabilize supply routes.

The dangerous assumption

Many are still assuming:

“This will blow over in a few weeks.”

But that assumption is deeply flawed.

I don’t think the Iran conflict will be resolved anytime soon while Trump is president. He still has about three years left in office. We shouldn’t assume he will fix it simply by threatening war.

In fact:

Escalation rhetoric continues
Oil markets are pricing in short-term shortages and long-term uncertainty
Even ending the conflict does not guarantee immediate normalization of oil flows

This means we are not looking at a temporary disruption.

We are potentially looking at a multi-year energy instability phase.

And that changes everything.

A Fragile Food System Built on Fossil Fuels

India’s food security rests on a deeply uncomfortable truth: It is heavily dependent on fossil fuels.

Nitrogen fertilizers (urea, ammonia) depend on natural gas
Phosphorus fertilizers depend on sulphur, a by-product of oil refining

Nations Race to Secure Enough Fertilizer and Prevent Food Crisis

This creates a direct chain: Oil crisis → Fertilizer shortage → Lower crop yields → Food inflation

Despite this vulnerability, policy direction remains skewed:

85% of fertilizer usage is chemical-based
₹1,400 billion subsidy goes to chemical fertilizers
Only ₹13.2 billion goes to organic alternatives
Less than 4% of farmers have adopted sustainable practices

Yes, adoption is slowly increasing:

Sustainable practices rose to 15% in 2024 (from 10% in 2022)
Natural farming is growing, but still limited (~800,000 farmers)

But the transition is nowhere near the scale required for resilience.

The real issue

India is not just dependent on oil—it is structurally locked into it.

A serious oil disruption would expose this fragility immediately.

What should be happening

Large-scale push toward biofertilizers & nitrogen-fixing crops
Incentive shift from chemical subsidies → agroecology
Investment in closed-loop systems (hydroponics, circular farming)

Instead, we are doubling down on the old model.

Transport: Are We Preserving Fuel for Survival or Wasting It?

In a real emergency, transport becomes the backbone of survival:

Food supply chains
Medical logistics
Emergency response

The key question is: Are we prioritizing fuel for these sectors—or burning it inefficiently?

Current concerns:

Heavy dependence on private vehicles
Lack of serious push for remote work as a fuel-saving policy
Limited visible prioritization of fuel rationing for essential services

One of the world's biggest energy groups is telling people to work from home as oil prices soar

Critical gaps:

Are we building strategic reserves specifically for emergency transport?
Can public transport sustain operations for months or years under constraint?
Is rail infrastructure ready to replace oil-heavy logistics?

Missed opportunities:

Aggressive expansion of electric buses
Revival of electric tram systems in dense cities
Mandatory remote work policies during fuel stress periods

Without these, any prolonged crisis risks turning transport into a bottleneck.

Medical Equipment Price Rise

Medical equipment costs are rising sharply due to fossil fuel price surges and supply chain disruptions, with recent geopolitical tensions in the Middle East driving input costs up by nearly 50% for plastic materials used in essential devices like syringes, IV sets, and catheters.

Medical device makers face cost squeeze as gas curbs and polymer prices surge