The crisis unfolding around Hormuz forces India into a web of fragilities and paradoxes. The fragility lies in just 21 million barrels of strategic reserves against China’s 1,397 million, in its near-total dependence on crude oil transiting through the Strait, in energy-intensive supply chains exposed to the shock, in a rupee under pressure and in reduced diplomatic room for manoeuvre. The political paradoxes surface in the public response: while BRICS foreign ministers gather in New Delhi, Modi is calling on the population to adopt a form of autarkic austerity, including working from home, postponing overseas weddings, cutting back on fuel, gold, imports and even cooking oil. In the background, India’s negotiating posture appears almost diaphanous: present in the scene, weak in its capacity to shape it. Was this situation truly unpredictable? For investors, companies and decision-makers, the advantage belongs to those who had already translated these signals into operational maps, scenarios and action thresholds through Market Intelligence and scenario analysis, before risk became news.
A crisis decided elsewhere
With the Iran-US dossier still open on the international diplomatic agenda, India finds itself managing the consequences of a crisis that bears on energy, security, maritime routes, BRICS positioning and the availability of foreign-exchange reserves; a crisis largely decided elsewhere, without any publicly discernible Indian positioning so far. The price of this negotiating marginality falls on businesses, from restaurateurs to glass workers, from ceramic manufacturers to taxi drivers and the agricultural sector, all exposed, in different ways, to the availability and cost of gas, fuels and fertilisers, as well as to the threat of disruption to day-to-day work; most of all, it is households that pay it.
The 11 May 2026 article by Carlo Pizzati, published by La Repubblica, describes this material transmission of geopolitical stress into ordinary life: the crisis starts around Hormuz and in the Persian Gulf quadrant, but reaches the daily life of a country of enormous scale, with still untapped potential, infrastructure lags and a response gap that we had begun to identify a year earlier.
On 14 May 2026, as the BRICS foreign ministers’ meeting opens in New Delhi under the Indian presidency, Subrahmanyam Jaishankar hosts a table emblematic of the contradiction of the moment. Wang Yi remains in Beijing during Donald Trump’s visit: China, a foundational weight within the bloc, sits in New Delhi through Ambassador Xu Feihong. Abbas Araghchi for Iran and Reem Al Hashimy for the United Arab Emirates share the same diplomatic frame, but bring into the room incompatible positions on the war crossing the Gulf.
Sherpas can work with precision and finesse on dossiers and declarations, but the political scene shows that the enlarged BRICS struggles to turn geopolitical mass into a common position. The contradiction becomes systemic when a forum that aspires to represent the Global South as a multilateral and multipolar voice has to compose the tensions generated by the crisis, while the host country, India, had only days earlier presented autarkic austerity as its emergency solution.
Key passages from Carlo Pizzati’s article
Narendra Modi’s India has issued austerity guidelines, urging people to work from home, reduce travel, postpone overseas weddings, curb consumption of fuel, gold and imported goods, while the Hormuz crisis reaches kitchens, petrol stations, restaurants and small businesses. The picture, picked up by newspapers, specialist websites and market sources, emerges from the 11 May 2026 article by Carlo Pizzati, published by La Repubblica.
And to think that 2026, with the positive negotiating backdrop between the EU and India, had seemed to begin with renewed optimism after the first warning signs of September 2025.
The article, as do others in recent days, notes that LPG imports have fallen from 2 to 0.95 million tonnes; 450 ceramic companies have closed in Gujarat, with 200,000 workers idle; and the Sensex opened down 950 points. India, the world’s fourth-largest economy by GDP according to the International Monetary Fund, finds itself facing a supply crisis while able to draw on strategic reserves of just 21 million barrels, against 263 million in Japan and 1,397 million in China.
In this crisis scenario, infrastructure response capacity and the use of available reserves determine the time window before a sharp slowdown begins to shape the picture: time to negotiate, replace supplies, absorb the shock and prevent energy and currency from turning into social pressure.
According to the article, the country found itself facing “closed restaurants and queues at petrol stations”, while Modi declared austerity and said: “We must reduce fuel consumption”. The giant that depends on crude oil passing through the Strait reveals itself to have feet of clay.
Now, before even speaking of government policy failure and setting aside for a moment the political dialectic between majority and opposition in the Asian giant, was all this truly unpredictable for India?
The Repubblica article itself, together with the Indian and international press covering the case, gives the measure of the attention with which the West and the rest of the world are observing the global effects of the Gulf crisis beyond their immediate quadrant. This appears to highlight a delicate passage: Modi’s appeals, surprising to the Indian public, may also be the consequence of surprise at the political summit.
The military crisis between Iran and the US had already, in 2025, produced more than one impact on the logistical fuses lit by the Gulf crisis and by US strikes. Certainly, in a few months even a giant such as India would have had little time to take corrective action; yet the fact remains that operational reasoning on Hormuz risk and the impacts of dependence, if it was ever carried out, appears to have remained on paper, without concrete follow-through.
The first escalation between the US and Iran in September 2025 had already illuminated the risk picture for net-importing countries with high dependence on crude oil transiting through Hormuz. The signal was therefore available, with its full scenario logic: whoever depends on that Strait without adequate strategic reserves and without its own diplomatic levers remains exposed to any subsequent escalation, regardless of its formal posture in the conflict.
India had all the elements needed to build an operational scenario on that basis, and this is where the search for the failure point begins. Was the decision-making chain missing the capacity to convert that signal into a plan before the shock made every move compulsory? In short: an upstream error in the analytical chain, decision inertia built up over years, an operational deficit, or a mix of all three?
The fragility was no mystery
The squeeze around Hormuz, the conflict as a whole and the moves of influential actors on the geopolitical chessboard are distorting the prices and availability of oil and derivatives arriving from the Gulf, while adding stress on the currency front. For India, already fragile on the foreign-exchange reserves front, this factor appears to be the real underlying driver of Modi’s speech.
The Repubblica article cites Teresa John, CFA, Deputy Head of Research & Economist at Nirmal Bang Institutional Equities. Within the context of Indian macroeconomic analysis, she is a market-based Indian source: she authors research on monetary policy, growth, inflation, exchange rates, current account dynamics and oil for Nirmal Bang Equities Private Limited, an operator regulated in India by SEBI as a Research Analyst and stockbroker on the NSE and BSE.
John is also cited by the Financial Times on a point that touches another cornerstone of our May 2025 report: the preservation of foreign exchange. From this, Repubblica draws the political-economic point: currency reserves are protected through structural policies far more incisive than offloading macroeconomic discipline onto individual sacrifices.
Without reserve, diversification and impact-protection policies, the individual renunciation of honeymoons in Bali looks more like an attempt at orderly surrender than a system response. Modi’s speech at least had the merit of making the crisis official. Its limit lies in the nature of the response: a behavioural response to a structural problem that scenario tools could have quantified with enough lead time to allow a different intervention.
Strategic reserves, energy imports, demand curves, storage, refining, port logistics, shipping, insurance, fertilisers and production continuity.
Foreign-exchange reserves, exchange rate, current account, currency baskets, swaps, monetary sterilisation, Indian interests in the Gulf and capital flows.
India’s Hormuz risk profile did not require a sophisticated intelligence exercise to determine, just as the issue of foreign-currency reserves and the highly dangerous mix that the two converging layers brought to the decision-making table should have been clear.
To simplify, a stress-test model applied to strategic reserves, energy imports, demand curves, infrastructure, storage capacity, refining, port logistics, shipping, insurance, fertilisers, informal labour, internal migration, demographics, fiscal capacity, currency pressure, diplomatic levers, Indian interests in the Gulf and production continuity in energy-intensive sectors would have been enough.
These are only some of the many variables that could be used; the difference, in an operating model, lies in the underlying logic, weights, critical correlations and activation thresholds, where energy imports, currency pressure, and the solidity, consistency and effective availability of foreign-exchange reserves must be analysed within the same analytical frame.
If oil drives the machinery, hard-currency liquidity keeps the circuit fluid, and it is no accident that the main stress and pressure factors in the major conflicts now under way operate through the threat or actual freezing of foreign assets.
Those who had worked these parameters into an operational scenario were already in position when the external crisis became a domestic emergency. Those who had filed them away as background are now managing the emergency in place of strategy.
One year earlier: the scenario we had already built
As early as February 2025, shortly after the start of Trump’s second presidency and in the wake of earlier statements by Trump that were anything but incidental, SCP had begun working on this risk profile.
In May 2025, our report The Predictable Crisis: India’s Systemic Exposure – Energy, Currency, Supply Chains and the Cost of Scenario Gaps – Seed Capital Pro Market Intelligence, developed by MINDS Lab through AKSIR Team at Seed Capital Pro, co-developed with other researchers and led by Giancarlo Puddu, had focused on the India quadrant as an emblematic case of energy, currency and supply-chain vulnerability in Hormuz crisis scenarios and beyond, despite the positive EU-India negotiating backdrop that emerged in January 2026.
The Predictable Crisis: India’s Systemic Exposure – Energy, Currency, Supply Chains and the Cost of Scenario Gaps
Subsequent updates for SCP clients, especially between September and October 2025 after the first US-Iran escalation, strengthened the reading, enabling hedging, targeted inventory build-up and logistical repositioning.
After the May 2025 report, SCP produced continuous updates for its clients, particularly between September and October 2025, in the wake of the first US-Iran escalation. The objective was to keep the picture monitored, verify risk thresholds and translate scenario analysis into actionable decisions. In concrete terms, this monitoring enabled interventions on hedging, targeted inventory build-up and logistical repositioning, also through engagement with new supply partners. In short: support for short-, medium- and long-term decisions in a complex and fragile context.
To those families of variables, the SCP report added further analytical layers: rupee performance, insurability of routes, urban demographic density, the role of internal migrant workers, Indian interests in the Gulf, HNWI relationships and capital flows.
India then presented the conditions of greatest exposure among the major economies analysed. The magnitude and precise timing of the current crisis were not, of course, predictable with precision, and never are; the direction and category of risk, however, were identifiable.
Our interest in the Indian subcontinent and the Indo-Pacific stems from investments, relationships and on-the-ground activities by Italian companies, leading industrial groups and mid-sized firms, as well as from India’s role in supply chains towards Europe. While remaining distant from China in terms of industrial scale, manufacturing depth and overall logistical capacity, India now carries in many sectors a productive, commercial and logistical weight that makes it a primary economic actor at global scale.
To this must be added the fertiliser issue, because the damage is not measured only at the diesel or petrol pump: when energy hits agriculture, transport and food production, a country already traversed by internal migration and social imbalances enters a broader risk zone.
From predictability to action
Even though life and markets contain situations that are difficult to anticipate in timing and magnitude, that observation, while true, does not exhaust the diagnosis. When available reserve levels, energy-dependence curves and maps of diplomatic influence are available for a stress test, structural vulnerability can be detected before it materialises as an emergency.
The September 2025 signal had already indicated the category of risk. Scenario work serves exactly this purpose: not the vain hope of eradicating uncertainty, but the construction of decision-making positions before the external shock makes them compulsory.
The data point speaks to the past. The decision belongs to the moment in which it is read.
Moving to action, with an understanding of the variables at play and a range of scenarios already studied, means already having a plan, an execution timetable and a list of points to implement, for example starting with commodity hedging, at least to sterilise the first wave, knowing that a “closed Hormuz” scenario remains exposed at the operational level in any case, despite excellent financial hedges, if vessels remain at a standstill. And it is therefore necessary to execute all the other points on the list, not only the first.
Hedges, stockpiles, consumption priorities, alternative routes, contracts, demand plans, currency allocation and protection of the most sensitive sectors could have been discussed before the crisis became public austerity.
Currency antifragility, however, passes through a channel that the appeal to individual sacrifice leaves wholly unused: Indian interests in the Gulf. Magnates, family groups, HNWIs and Indian construction companies have for years had a significant presence in Gulf economies, in real estate, construction and logistics infrastructure.
That network was already on the ground, already connected to local decision-making centres, already embedded in capital and contract flows. A diplomacy of interests, conducted through banks, insurance companies, construction sites and private capital, could have opened informal channels of reading and intervention: information on transit margins, parallel bilateral agreements, positioning on alternative routes, engagement with local operators able to move laterally around government-level blockages.
All this without waiting for the crisis to pass entirely through official diplomatic channels, often the slowest and the most exposed.
An alternative pipeline takes many years to build. Solid foreign-exchange reserves are built through years of managed surpluses, pre-negotiated swaps, basket diversification and planned monetary sterilisation. When the crisis arrives, those who skipped that phase draw on stocks while the drain accelerates.
A distinction, already underlined by our report, remains very clear: the length of the structural construction site does not justify tactical immobility. Every month lost now pushes the arrival point further out and shortens the remaining margin.
Starting swap agreements today, activating networks of engagement in the Gulf, diversifying currency baskets and enabling Indian industrial groups present in the area to function also as antenna and lever means gaining real time for the next window. Postponement is already a choice: it means arriving at the next crisis with reserves further reduced, routes still to be negotiated and counterparties to be convinced under pressure rather than in ordinary conditions. Partial and imperfect action now is worth more than waiting for the complete plan.
Twelve takeaways
Energy dependence on a single geopolitical transit point is a risk that can be estimated before the shock.
The gap between India’s 21 million barrels, Japan’s 263 million and China’s 1,397 million was already written into public data. For those managing exposures to Hormuz, Suez or other logistical choke points, the alert threshold should be defined when building it costs less than bearing its absence.
The US-Iran signal of September 2025 had already defined the category of risk.
A second episode on the same structure should be treated as scenario confirmation, with a magnitude consistent with the exposed country’s reserves, energy dependence, currency, supply chains and diplomatic capacity.
Behavioural responses attenuate the symptom, while reserves and diversification belong to the structural layer.
Cutting back on cooking oil, postponing weddings and compressing consumption can sensitise the country, but currency reserves, energy stocks, alternative contracts, currency protection and industrial priorities belong to a different class of decision.
Internal migration is an early warning indicator.
When workers return to their villages of origin, the crisis has already reached the circuits of informal labour before official macroeconomic data can measure it. For those with suppliers, subcontractors or production partners in India, those flows are worth as much as a GDP figure, because they arrive earlier and read another depth of the system.
Energy-intensive supply chains fail in a recognisable sequence.
Ceramics, glass, leather, brass, construction and restaurants react according to energy intensity, margin elasticity, gas availability and substitution capacity. Industrial gas consumption often anticipates sectoral stress before production, employment and balance sheets record it.
Indian capital in the Gulf is both a diplomatic asset and a double exposure.
Indian HNWI investments in construction, real estate, private finance and services in the Gulf can create informal channels of reading and influence; without strategy, scenario analysis and planning, they expose the same actors to the shock hitting energy, currency, construction sites, contracts and negotiating relationships, as well as to war risk on the ground.
Those who had built a scenario before the shock now hold an operational and financial edge.
The advantage concerns hedging, targeted stocks, logistical repositioning, engagement with new supply partners and protection of the most sensitive sectors. The difference is measured less in predicting the event and more in the quality of the moves already available when the event arrives.
The function of scenario analysis is to build a decision-making position before compulsion.
The date of the shock rarely lends itself to precise prediction; the structure that may fail, however, is often already clearly identifiable. The analysis serves to transform that structure into thresholds, owners, options and costs of inaction.
Market Intelligence and Geopolitical Intelligence become decisive when they know how to weigh sources.
Multi-source coverage, AI, noise reduction and evidence hierarchy matter more than documentary accumulation. Without scenario analysis, the search for resilience starts to resemble water-divining, provided the well has not been closed manu militari.
HUMINT, OSINT, WEBINT and SOCINT are the operational Swiss Army knife of opaque crises.
Human sources, open sources, web traces and social signals intercept fear, adaptation, incentives, negotiating postures and reaction thresholds. Psychographic readings help to see where the surface declares stability while actors, suppliers, industrial families, investors and apparatuses prepare hedges, retreats or lateral exits.
The social variable belongs to economic security.
Restaurants shut, queues at petrol stations, scarce fertilisers, returning migrant workers and compressed consumption turn energy and currency into political pressure. A model focused only on prices, barrels and routes sees the map, but loses the terrain.
To those who ask what reports like ours are for, the answer often comes from the newspapers. But by then it is news, and therefore already late.
The value of a report with scenario analysis in support of decision-making does not lie in saying “A will happen on day X”, but in identifying early enough which structure is at risk of failing when day X arrives. The Predictable Crisis: India’s Systemic Exposure – Energy, Currency, Supply Chains and the Cost of Scenario Gaps belongs to a coordinated system of analytical tools. Newsflow certainly provides confirmations and triggers, but discovering a structural crisis through the newsflow means arriving late. A major problem.
To understand how these scenarios affect your company, across routes, supply chains, currency exposure or logistical positioning, SCP works on risk analysis and decision positioning before the shock makes every option compulsory.
India; Strait of Hormuz; Persian Gulf; Iran; United States; China; Japan; BRICS; Narendra Modi; Subrahmanyam Jaishankar; Wang Yi; Xu Feihong; Abbas Araghchi; Reem Al Hashimy; Teresa John; Nirmal Bang Institutional Equities; International Monetary Fund; Carlo Pizzati; La Repubblica; Seed Capital Pro; AKSIR Team; MINDS Lab.
Market Intelligence; Geopolitical Intelligence; Scenario Analysis; energy-currency stress testing; HUMINT; OSINT; WEBINT; SOCINT; supply-chain resilience; strategic reserves; foreign-exchange risk; HNWI Gulf networks.
Oil; LPG; gas; fertilisers; ceramics; glass; leather; brass; construction; restaurants; agriculture; shipping; insurance; real estate; logistics infrastructure; informal labour.
Energy dependence on Hormuz; limited strategic reserves; currency pressure; social transmission of the shock; diplomatic margin; Indian capital in the Gulf as an informal lever and as a double exposure.
Two operating scenarios on the risk of false adaptation to AI in professional services.
How the simultaneous reduction of barriers generates mass adoption.
Market Intelligence, scenario analysis and decision sciences from the SCP team.