Indian refiners have begun negotiating for additional crude cargoes from the US, Russia and West Africa to ensure supplies remain adequate in the event of the Middle East conflict drags on for a longer period, industry officials and analysts said.
Refineries, which convert crude oil into fuels like petrol and diesel, have deferred planned maintenance shutdowns and are maintaining normal processing rates to create buffers that could meet the country’s requirement in the near term, they said.
India imports about 88 per cent of its crude oil requirement, with roughly half of those supplies in February passing through the Strait of Hormuz, the narrow sea lane between Iran and Oman that serves as a key energy transit route for global markets.
The recent military strikes by the United States and Israel on Iran, and Tehran’s retaliatory attacks on US bases in neighbouring countries as well as Israel, have sharply escalated tensions in the region, leading to a near halt in tanker movements through the strategic waterway.
“Non-strait sources are fully operational and we are sourcing more and more supplies from non-conflict zones,” a top oil ministry source said. “Non-Strait sources accounted for 60 per cent of supplies in 2025 which after the Middle East conflict climbed to 70 per cent.” Indian refiners are tapping crude from West Africa, Latin America and the US, he said adding the US Treasury Department issuing a 30-day waiver to allow the sale and delivery of sanctioned Russian oil that has already been loaded on vessels to India has opened up another avenue.
The waiver permits the sale, delivery or discharge of crude oil and petroleum products of Russian origin that were loaded onto vessels on or before March 5, including ships subject to certain sanctions. The exemption remains valid until April 5, allowing cargoes already in transit to be completed without violating sanctions restrictions.
There were 120 million barrels of Russian crude on the water. Of this, as many as 15 million barrels of Russia-origin crude are sitting on tankers close to India – in the Arabian Sea and Bay of Bengal – while another 7 million Russian crude barrels are idling near Singapore.
Industry sources said Indian refiners have started buying Russian oil.
Reliance Industries, Hindustan Petroleum Corporation Ltd and HPCL-Mittal Energy Ltd, which had halted purchases of Russian crude following US sanctions imposed last year on Moscow’s leading producers Rosneft and Lukoil, have returned to the market to secure Russian cargoes, they said.
Before the United States imposed sanctions on Russia’s leading oil producers Rosneft and Lukoil in October 2025, Reliance Industries was the largest buyer of Russian crude, importing more than 500,000 barrels per day under a long-term supply agreement with Rosneft.
The Oil Ministry official said India never stopped buying Russian oil – it imported some 1.04 million barrels per day of Russian crude in February, down from 1.6-1.8 million bpd levels seen in 2023-2025.
“We are in a very comfortable position as far as crude and finished products are concerned,” he said, adding the combined inventory can meet the country’s demand for 50 days.
The country currently holds approximately 144 million barrels of crude in onshore storage, equivalent to around 30 days of coverage at 2025 import levels.
Importantly, the supplies are being constantly replenished, he said.
India’s Strategic Petroleum Reserves have the capacity to cover about 9.5 days of net oil imports. In addition, state-run oil companies have storage for crude and petroleum products equivalent to 64.5 days of net imports, taking the country’s total storage capacity to roughly 74 days of net imports, according to petroleum ministry data.
While India may be able to secure adequate physical crude through alternative sources, analysts cautioned that the overall cost structure could worsen due to higher crude prices, increased freight and insurance premiums, and longer shipping routes.
International crude oil prices have jumped to over USD 92 per barrel from around USD 70 when the US and Israel attacked Iran on February 28. Liquefied natural gas (LNG) prices have more than doubled to USD 24-25 per million British thermal unit.
The higher prices will add to India’s import bill, analysts said, adding sourcing from non-Middle Eastern suppliers mean longer shipping and higher freight. Also, insurance premiums have jumped.
Every USD 10 increase in crude prices could add 20-25 basis points to the consumer price index if passed on to consumers, or widen the fiscal deficit if taxes are cut to neutralise the impact.
The immediate impact will be a higher import bill, a widening current account deficit and pressure on the rupee.
India, the world’s third-largest crude importer, depends on Middle East supply for about half of its imports, and the de facto halted tanker traffic in the Strait of Hormuz has put severe pressure on its supplies. In February 2026, India received 2.8 million bpd crude, accounting for 53 per cent of total imports, from Iraq, Saudi Arabia, the UAE, Kuwait and Qatar.
For the world, around 15 million barrels per day of crude and 5 million bpd of oil products passed through the Strait of Hormuz in 2025.
India’s exposure to crude flows through the Strait of Hormuz was lower at about 41 per cent in 2025, but has increased in recent months as refiners curtailed purchases of Russian crude. Imports from Russia averaged around 1.15 million barrels per day in the first two months of 2026, compared with about 1.7 million bpd in 2025.
Published on March 8, 2026
