India has moved swiftly to safeguard its energy security by purchasing roughly 30 million barrels of Russian crude oil after a temporary waiver from the United States allowed the country to buy shipments already at sea, even as escalating tensions in West Asia and disruptions around the Strait of Hormuz trigger fears of a global oil shock.
Government officials said on Wednesday that India’s crude supply remains stable despite the growing geopolitical crisis in the region. Authorities indicated the country currently has access to about 5.5 million barrels of crude per day, volumes that exceed the typical flows India would normally receive through the critical Gulf shipping corridor.
The reassurance comes amid intensifying conflict following U.S. and Israeli strikes on Iran in late February and retaliatory actions that have rattled global energy markets. Iran’s subsequent moves to restrict traffic through the Strait of Hormuz a narrow channel connecting the Persian Gulf to international shipping lanes have heightened concerns about disruptions to one of the world’s most important energy routes.
For India, which imports nearly 90 percent of its oil requirements, the risk of supply interruptions carries significant economic implications. Roughly 40-50 percent of India’s crude imports typically move through the Strait of Hormuz, along with substantial volumes of liquefied petroleum gas and liquefied natural gas.
To cushion against potential shortages, Indian refiners rapidly secured available Russian crude cargoes in the spot market after Washington allowed the purchase of shipments that had already been loaded onto tankers but had not yet reached buyers.
Industry sources said refiners including Indian Oil Corporation and Reliance Industries were among the largest buyers, collectively snapping up nearly all available cargoes moving through Asian waters.
Industry and Market Impact
The rush to secure alternative crude reflects how quickly global oil flows can shift when geopolitical tensions threaten key supply routes.
India had reduced Russian crude purchases in recent months while increasing imports from Gulf producers such as Saudi Aramco and Iraq’s state oil suppliers. However, disruptions in the Middle East have forced refiners to reconfigure supply chains once again.
Several oil tankers already in transit across Asian waters have reportedly altered course toward Indian ports after the waiver. Among them were vessels that had initially been headed elsewhere but redirected shipments to meet India’s sudden demand for replacement supplies.
The crude secured by Indian refiners includes multiple Russian grades such as Urals, ESPO and Varandey. Unlike earlier months when Russian oil was sold at deep discounts following Western sanctions, the latest cargoes were offered at premiums of $2 to $8 per barrel above the global benchmark Brent crude a reflection of tightening supply conditions.
Before the Ukraine war, India purchased very little Russian oil. That changed dramatically after Western sanctions prompted Moscow to sell crude at lower prices. At the peak of these purchases in mid-2024, India was importing more than two million barrels per day of Russian crude.
However, imports had declined to about 1.06 million barrels per day by February amid pressure from Washington and adjustments in India’s supply mix.
Why This Matters
The crisis has broader economic implications beyond supply security.
Brent crude prices briefly surged to around $120 per barrel during the early stages of the conflict before retreating to roughly $90. Even at those levels, economists warn the impact could ripple through India’s economy if disruptions persist.
Higher oil prices typically push up transportation costs, which can cascade through supply chains and drive inflation. India’s heavy reliance on imported energy makes it particularly vulnerable to such shocks.
Early signs of price pressure are already emerging. Domestic LPG cylinder prices have increased in recent days, and shortages of commercial LPG supplies are beginning to affect some businesses.
Economists also caution that sustained high oil prices could widen India’s current account deficit. According to estimates by analysts at Kotak Mahindra Bank, every $10 increase in crude oil prices can raise the country’s current account deficit by roughly $18–$20 billion, equivalent to about 0.5 percent of GDP.
Currency markets have also reacted to the turmoil. The Indian rupee has weakened toward the 92-per-dollar level, raising concerns that imported inflation could intensify if the conflict continues.
What Happens Next
The outlook for global oil markets now depends heavily on how long the geopolitical crisis lasts and whether shipping through the Strait of Hormuz resumes at normal levels.
For policymakers in New Delhi, the immediate priority is ensuring stable energy flows and preventing sudden spikes in domestic fuel prices. Officials say the country currently holds sufficient reserves to maintain supply for at least a month, giving authorities time to secure alternative shipments.
The situation is also being closely monitored by the Reserve Bank of India. Analysts say sustained energy price increases could complicate the central bank’s inflation outlook ahead of its next monetary policy review.
The RBI held its policy rate steady at 5.25 percent earlier this year while maintaining a neutral stance. However, a prolonged oil shock could force policymakers to reassess the trajectory of inflation and growth.
Financial advisers are already urging households to prepare for potential volatility by reducing high-interest debt and building emergency savings. Rising fuel and grocery costs, combined with currency pressures, could strain household budgets if the crisis escalates.
In the meantime, India’s rapid purchase of Russian crude highlights how the world’s third-largest oil importer is adapting to a rapidly shifting energy landscape balancing geopolitical realities with the need to keep its economy and fuel supplies running smoothly.