Indian refiners have begun negotiating additional crude loads from the US, Russia and West Africa to ensure supplies remain adequate if the conflict in West Asia drags on for longer, industry officials and analysts said.
Refineries that convert oil into fuels such as gasoline and diesel have postponed planned maintenance shutdowns and are maintaining normal processing rates to create buffers that could meet the country’s demands in the near term, they said.
India imports about 88% of its oil needs, with about half of those deliveries in February passing through the Strait of Hormuz, a narrow sea route between Iran and Oman that serves as a key energy transit route for global markets.
Israel-Iran War Update March 8, 2026
Recent military strikes by the US and Israel on Iran and retaliatory attacks by Tehran on US bases in neighboring countries as well as in Israel have sharply escalated tensions in the region, leading to a near-halt of tanker movements through the strategic waterway.
“Resources outside the strait are fully operational and we are getting more and more supplies from non-conflict zones,” a senior oil ministry source said. “Non-Strait sources accounted for 60% of supply in 2025, rising to 70% following the Middle East conflict.”
Indian refiners have been taking oil from West Africa, Latin America and the US, he said, adding that the US Treasury is issuing a 30-day waiver to allow the sale and supply of sanctioned Russian crude already loaded on vessels to India, opening another avenue.
The waiver allows the sale, delivery or discharge of oil and petroleum products of Russian origin that were loaded onto vessels on or before March 5, including vessels subject to certain sanctions. The exemption remains valid until April 5, allowing cargo already in transit to be completed without breaching sanctions restrictions.
There are 120 million barrels of Russian oil on the water. Of this, up to 15 million barrels of Russian-origin oil sit on tankers near India – in the Arabian Sea and the Bay of Bengal – while another 7 million barrels of Russian oil sit idle near Singapore.
Industry sources said Indian refiners have started buying Russian crude.
Reliance Industries, Hindustan Petroleum Corporation Ltd. and HPCL-Mittal Energy Ltd., which halted purchases of Russian crude following last year’s U.S. sanctions on top Moscow producers Rosneft and Lukoil, have returned to the market to secure Russian cargo, they said.
Before the United States imposed sanctions on top Russian oil producers Rosneft and Lukoil in October 2025, Reliance Industries was the largest buyer of Russian oil, importing more than 5,00,000 barrels per day (bpd) under a long-term supply contract with Rosneft.
An oil ministry official said India has never stopped buying Russian oil – importing about 1.04 million barrels per day of Russian oil in February, down from 1.6 to 1.8 million barrels per day recorded in 2023-25.
“We are in a very comfortable position in terms of raw and finished products,” he said, adding that the combined stocks can meet the country’s demand for 50 days.
The country currently holds approximately 144 million barrels of oil onshore, equivalent to around 30 days of coverage at 2025 import levels.
The important thing, according to him, is that the stock is constantly replenished.
India’s strategic oil reserves have the capacity to cover about 9.5 days of net oil imports. In addition, state-owned oil companies have stocks of crude oil and petroleum products equivalent to 64.5 days of net imports, bringing the country’s total storage capacity to about 74 days of net imports, according to the oil ministry.
While India may be able to secure adequate physical oil through alternative sources, analysts have warned that the overall cost structure could worsen due to higher oil prices, increased freight and insurance charges and longer shipping routes.
International oil prices jumped to over ₹92 per barrel from around ₹70 when the US and Israel attacked Iran on 28 February. Liquefied natural gas (LNG) prices more than doubled to ₹24-25 per million British thermal units.
Higher prices will add to India’s import bill, analysts said. Adding sources from suppliers outside the Middle East means longer shipping and higher shipping costs. Insurance premiums also jumped.
Every ₹10 increase in oil prices could add 20-25 basis points to the CPI if passed on to consumers or widen the fiscal deficit if taxes are cut to neutralize 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 oil importer, depends on supplies from West Asia for about half of its imports, and the de facto shutdown of tanker traffic in the Strait of Hormuz has put severe pressure on its supplies. In February 2026, India received 2.8 million bpd of oil, accounting for 53% of total imports, from Iraq, Saudi Arabia, the United Arab Emirates, Kuwait and Qatar.
For the world, about 15 million barrels of oil per day and 5 million barrels of oil per day passed through the Strait of Hormuz in 2025.
India’s exposure to oil flows through the Strait of Hormuz was lower at around 41% in 2025, but has increased in recent months as refiners cut back on purchases of Russian crude. Imports from Russia averaged about 1.15 million barrels per day in the first two months of 2026, compared with about 1.7 million barrels per day in 2025.
Published – 8 March 2026 21:19 IST
