Twenty-eight Indian-flagged vessels sit idle in Persian Gulf waters. Seven hundred and seventy-eight seafarers wait. The Strait of Hormuz—through which flows a third of global seaborne oil and nearly a quarter of liquefied natural gas—has become a chokepoint. Again.
The immediate response follows a predictable script. Government monitors crew safety. Industries face supply cuts. Domestic consumers get priority. What boards should be asking: how did we get surprised by a risk that materialises every few years?
This is not the first Hormuz crisis. It will not be the last. The strait has been a flashpoint since the Iran-Iraq War in the 1980s. Tensions spike, shipping routes close, prices surge, operations scramble. Yet corporate India consistently treats geopolitical supply chain disruption as an external shock rather than a manageable enterprise risk.
I have reviewed enough crisis response protocols to recognise the pattern. Companies build elaborate operational continuity plans for technology failures, natural disasters, even pandemic scenarios. But geopolitical risk gets relegated to a single line item in the annual risk assessment: “Political instability in key markets.” No stress testing. No alternative sourcing strategies. No contract terms that account for force majeure events lasting weeks rather than days.
The natural gas supply crunch reveals the depth of this oversight gap. Industries that depend on uninterrupted LNG imports—steel, chemicals, fertilisers—now face production cuts with little notice. Their boards approved capital allocation decisions based on fuel cost assumptions that presumed normal shipping lanes. When was the last time an independent director asked to see the company’s energy security matrix? Or questioned whether fuel procurement contracts included provisions for alternative supply routes during extended geopolitical disruptions?
What makes this particularly concerning for governance practitioners: the government’s prioritisation language suggests this crisis could extend beyond the typical few-day disruption. “Supply cuts for industries” and “prioritisation for domestic use” are not temporary measures. They signal systemic reallocation of scarce resources.
Boards that treat this as a one-off external shock miss the deeper structural question. Global trade increasingly flows through a handful of critical chokepoints—Suez Canal, Strait of Malacca, Panama Canal, Strait of Hormuz. Climate change, geopolitical fragmentation, and rising nationalism make these routes more vulnerable, not less. Yet most Indian companies still design their supply chains as if these passages will remain open indefinitely.
The seafarer angle adds another layer boards rarely consider. Those 778 crew members represent more than operational disruption—they represent reputational and legal exposure. What happens if crew welfare becomes compromised during extended delays? What insurance coverage applies to stranded personnel? Which jurisdiction governs liability when vessels remain stuck in international waters for weeks?
The forward story here extends well beyond this specific crisis. As geopolitical tensions become structural rather than cyclical, boards that continue approving supply chain strategies based on historical normalcy assumptions are setting their companies up for repeated operational shocks. The question is not whether the Strait of Hormuz will face future disruptions. The question is whether corporate governance frameworks have evolved to manage supply chain resilience as a core enterprise risk rather than an external variable.
My Boardroom Takeaway
Directors should require management to present scenario planning that assumes critical trade routes will be disrupted for 30-90 day periods at least once every three years. This means stress-testing fuel procurement strategies, evaluating alternative supplier geographies, and building contract flexibility for extended force majeure events. The next Hormuz crisis is not a question of if, but when—and boards that wait for government prioritisation announcements to trigger their supply chain reviews have already failed their oversight responsibilities.