Full Breakdown
India Navigates Energy Supply Challenges Amid Middle East Conflict
3/10/2026, 10:01:40 PM
Strategic Oil Purchases from Russia
India has recently purchased 30 million barrels of oil from Russia, facilitated by a 30-day waiver granted by the United States. This waiver aims to stabilize the global oil market following escalating tensions in the Middle East, particularly after US-Israeli attacks on Iran. Despite a gradual reduction in Russian oil purchases since last year, Indian refiners, including the Indian Oil Corporation and Reliance, have capitalized on the opportunity to acquire unsold Russian crude from the spot market. Reports indicate that Indian Oil Corporation bought nearly 10 million barrels, with Reliance purchasing a similar amount. The waiver specifically allows for the purchase of Russian crude loaded on vessels before March 5, 2026.
Domestic Energy Supply Measures
In response to disruptions in gas supplies due to the conflict, India has invoked the Essential Commodities Act (ECA) to ensure adequate domestic cooking gas supplies for its population of 1.4 billion. The ECA grants the government authority to regulate production, storage, and transportation of essential commodities to prevent unreasonable price spikes and shortages. The conflict has severely impacted shipping through the Strait of Hormuz, a critical route for India's oil and gas imports, which account for 85% of its oil and nearly half of its natural gas. The Indian government has directed refineries to increase production of liquefied petroleum gas (LPG) and prioritize supply to essential sectors, including households and transportation.
Diesel Supply to Bangladesh
Amidst the energy crisis, India has also agreed to supply 5,000 tonnes of diesel to Bangladesh, which is facing fuel rationing due to limited supplies exacerbated by the Middle East conflict. This shipment is part of a broader agreement where India commits to supplying 180,000 tonnes of diesel annually to Bangladesh via pipeline. The recent energy shortages have led to panic buying in Bangladesh, further straining supplies.
Criticism and Opposition
Critics argue that India's reliance on Russian oil could undermine its energy security in the long term, especially as global tensions rise. The geopolitical implications of purchasing oil from Russia, particularly in light of Western sanctions, have raised concerns among analysts. Additionally, the Indian government's decision to invoke the ECA has faced scrutiny regarding its effectiveness in addressing the immediate energy crisis.
Official Statements & Responses
The Indian government has emphasized its autonomy in energy procurement, stating, "India will buy oil from wherever it is available." This sentiment reflects India's strategic approach to energy security amid global uncertainties. Meanwhile, US Treasury Secretary Scott Bessent described the waiver as a "stopgap measure" to alleviate market pressures.
Conflicting Reports & Gaps
There are discrepancies regarding the impact of the Middle East conflict on oil prices. While Brent crude prices surged to $119 per barrel, reports indicate that Urals crude is trading above Brent prices in India, a rare occurrence. The situation remains fluid, with ongoing discussions among G7 nations about releasing strategic reserves to stabilize the market.
What's Next
As the conflict continues, India is likely to face ongoing challenges in securing stable energy supplies. The government has formed a committee to examine supply issues, particularly in light of the sudden shortage of cooking gas cylinders affecting the hospitality industry. The evolving geopolitical landscape will further influence India's energy strategy and procurement decisions in the coming months.
