What happens when the way long-term supply contracts were drafted, and the conditions under which they are now being performed, undergo a turbulent shift? What to do?
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I. Introduction and background
Due to the ongoing turmoil in the Middle East, many supply chain contracts are in disarray. The Strait of Hormuz has been cordoned off, through which approximately 20% of global petroleum liquids transit daily, driving up war-risk premiums and energy prices. India’s exposure to this crisis is structural rather than incidental, as it heavily relies on the Middle East for its oil and gas. Indian state refineries and private operators face simultaneous pressure on import costs, supply continuity, and the legal enforceability of their long-term procurement contracts.
