India emerges as supply chain alternative amid Gulf volatility

Geopolitical instability and disruptions in the Gulf region are forcing global companies to diversify their supply chains, with India emerging as a primary alternative for multinational corporations. The volatility in the Gulf, a critical link between energy sources and industrial nations, has led to increased transit times and higher transportation costs, prompting firms to seek more flexible manufacturing and logistics hubs.

To maintain energy flows amidst disruptions in the Strait of Hormuz, Qatar and the UAE have implemented emergency ship-to-ship (STS) transfers for Liquefied Natural Gas (LNG). These complex operations involve transferring cargo between vessels off the coasts of Oman and the UAE to bypass blockaded or damaged routes.

These emergency transfers are costly and technically demanding, often adding over $1 million per transfer and up to 35 hours of sailing time. Recent operations included the transfer of Qatari and UAE-loaded cargoes to vessels destined for markets in Asia and Japan. While India is benefiting from its strategic location and manufacturing capacity as a supply chain alternative, the energy sector continues to utilize these expensive workarounds to ensure delivery to global buyers.