India's Crude Oil Import Strategy Amidst West Asia Conflict

India is heavily reliant on crude oil imports, with approximately 88% of its requirement being imported. A significant portion of these imports, around half in February, pass through the strategic Strait of Hormuz, a vital energy transit route located between Iran and Oman.

Alternative Sourcing and Strategies

• Indian refiners are exploring additional crude cargoes from the U.S., Russia, and West Africa to mitigate risks posed by ongoing conflicts in West Asia.
• Refineries are postponing maintenance shutdowns and maintaining regular processing rates to ensure a buffer for domestic needs.

Geopolitical Tensions and Their Impact

• Tensions have escalated due to military strikes involving the U.S., Israel, and Iran, leading to disruptions in tanker movements through the Strait of Hormuz.
• India is increasing supplies from non-conflict zones, with non-strait sources contributing 70% of supplies in 2025, up from 60%.

Russian Oil Imports

• India has resumed purchasing Russian oil, facilitated by a U.S. Treasury waiver allowing delivery of sanctioned Russian oil until April 5.
• Indian refiners like Reliance Industries and Hindustan Petroleum have renewed buying from Russia, with 1.04 million barrels per day imported in February.

Storage and Supply Capacities

• India's current crude inventory is sufficient for 50 days, with 144 million barrels stored onshore.
• The country's Strategic Petroleum Reserves cover 9.5 days of net imports, while state-run companies have additional storage for 64.5 days, totaling roughly 74 days of net imports.

Economic Implications

• Crude prices have risen to over ₹92 per barrel, impacting India's import bill and potentially widening the fiscal deficit.
• Longer shipping routes and higher freight and insurance costs are anticipated due to sourcing from non-Middle Eastern suppliers.
• Every ₹10 increase in crude prices could add 20-25 basis points to the consumer price index.

Dependence on West Asian Suppliers

• In February 2026, India imported 2.8 million barrels per day from key Middle Eastern countries, comprising 53% of total imports.
• India's crude imports via the Strait of Hormuz were around 41% in 2025 but have risen recently due to reduced Russian crude purchases.