International Relations / Energy Security
Date: 6 March 2026 | Source: The Indian Express, Delhi Edition, 6 March 2026
Tags: Strait of Hormuz, Force Majeure, UNCLOS, India-US Relations, Energy Security, CLAT GK
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With the Strait of Hormuz effectively shut down during the US-Israel-Iran conflict, India entered emergency talks with the US for political risk insurance on energy cargoes. This article covers the geography, legal dimensions, and what CLAT aspirants must know.
Introduction
The Indian government entered active talks with the United States on political risk insurance for energy cargo vessels transiting the Strait of Hormuz. This followed a near-complete halt in cargo movement triggered by Iran’s warnings during the escalating US-Israel-Iran conflict.
🛢️ India’s Energy Dependence — Key Facts
- 88%+ of India’s crude oil is imported
- India is the world’s 3rd largest oil consumer and 4th largest LNG importer
- ~2.5–2.7 million barrels/day of crude was transiting the Strait to India
- About one-fifth of global liquid petroleum passes through the Strait
The US DFC Initiative
US President Donald Trump ordered the US Development Finance Corporation (DFC) to provide political risk insurance for maritime trade, especially energy cargoes transiting the Gulf.
India’s Emergency Response
Indian officials reported a 6–8 week cushion of crude oil and fuel stocks. However, LNG was more vulnerable — Petronet LNG, India’s largest LNG importer, issued force majeure notices to its key supplier QatarEnergy.
⚠️ Key Takeaways for CLAT
- Force Majeure: Clauses that excuse contract performance when extraordinary events make it impossible.
- UNCLOS: Governs freedom of navigation. The Strait of Hormuz is subject to transit passage rights under UNCLOS.
- GATT Article XXI: WTO’s national security exception.
- ISPRL: Indian Strategic Petroleum Reserves Limited manages India’s strategic oil stockpile.
Glossary
| Strait of Hormuz | 33 km wide passage between Iran and Oman; connects the Persian Gulf to the Arabian Sea. ~20% of global oil trade transits here. |
| Force Majeure | A contract clause that relieves parties of obligations when extraordinary, unforeseeable events make performance impossible. |
| UNCLOS | UN Convention on the Law of the Sea — the primary international treaty governing rights over oceans, EEZs, and freedom of navigation. |
| US DFC | US Development Finance Corporation — provides loans, guarantees, and political risk insurance for private investments. |
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