Full Breakdown
India Considers Russian Oil Amid Iran Crisis
3/2/2026, 8:27:13 PM
Current Situation and Contingency Plans
Indian state refiners and government officials convened recently to develop contingency plans in response to a crisis in Iran that has significantly disrupted oil flows through the Strait of Hormuz. This strategic waterway is crucial for approximately half of India's oil imports. In light of these developments, India is exploring the possibility of sourcing Russian oil, which has been accumulating in Asian waters. Following the invasion of Ukraine, India emerged as a key buyer of Russian seaborne crude, although recent U.S. pressure has led to a reduction in these purchases.
As of February, India imported just over 1 million barrels of Russian oil daily, marking a significant decrease from previous levels. The Indian oil ministry has indicated that the country has enough supplies to last about two weeks, combining both commercial and state reserves. To address the potential shortfall, officials are advocating for diplomatic engagement with Washington to secure more flexibility in oil sourcing.
Alternative Oil Sources and Domestic Adjustments
In addition to considering Russian oil, Indian refiners are evaluating several alternatives to mitigate the impact of the crisis. These include tapping into the strategic petroleum reserve, expediting oil supplies from Venezuela, and encouraging domestic producers to increase output. Furthermore, refiners are negotiating with Saudi Aramco to enhance crude shipments via pipeline to the Red Sea port of Yanbu, thereby bypassing the Strait of Hormuz.
Should the situation persist, the Indian government may contemplate restricting fuel exports to ensure sufficient domestic supply. This could involve prioritizing household gas and directing industrial users to switch to alternative fuels. Additionally, major private refiners like Reliance Industries Ltd. may be urged to redirect more fuel to the domestic market.
Vulnerability and Supply Statistics
India's oil vulnerability is underscored by its reliance on the Middle East for energy supplies. Oil Minister Hardeep Puri noted that India holds approximately 30 million barrels of oil in reserve, equivalent to about six days of consumption. However, this reserve is limited to crude oil and does not account for liquefied petroleum gas (LPG) or liquefied natural gas (LNG). The country imports between 2.5 million to 2.7 million barrels of crude oil daily through the Strait of Hormuz, with nearly two-thirds of LNG shipments and about 95% of LPG supplies also originating from the Middle East.
Official Statements and Responses
The Indian government is actively assessing its options to navigate the ongoing crisis. Officials have expressed the need for strategic planning to ensure energy security amid geopolitical tensions. The oil ministry has not publicly commented on specific negotiations or strategies being pursued.
Criticism and Opposition
While the government is exploring various avenues to secure oil supplies, critics argue that reliance on Russian oil could complicate India's foreign relations, particularly with Western nations. The balance between energy security and geopolitical considerations remains a contentious issue as India navigates its energy needs in a volatile global landscape.
