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| Symbolic image: Reuters |
As tensions between Iran and Israel triggered a sharp rise in global oil prices, India has significantly increased its crude oil imports from both Russia and the United States to stabilize domestic fuel prices and secure future energy needs.
Following 12 days of escalating attacks, U.S. President Donald Trump announced a ceasefire between Iran and Israel. However, the conflict created major uncertainty in the global oil market, with Iran even threatening to shut down the strategically crucial Strait of Hormuz — a vital route for global oil shipments. In response, India boosted its oil imports from Russia and the U.S., according to a report by The Economic Times.
The surge in global fuel prices is also impacting countries like Bangladesh, where experts warn it could drive inflation, increase power generation costs, raise industrial expenses, and disrupt trade balances and remittance flows.
Energy analysts believe this volatile environment highlights the need for countries like Bangladesh to diversify and strengthen their energy supply chains by exploring alternative sources such as LNG and renewable energy. They also emphasize the importance of efficient domestic consumption to cushion the economy from sudden fuel price spikes.
Anticipating these risks, the Indian government had already begun stockpiling oil from alternative sources. By June, India’s combined imports from Russia and the U.S. exceeded those from traditional suppliers like Saudi Arabia and Iraq.
According to market intelligence firm Kpler, India imported between 2 and 2.2 million barrels of Russian crude per day in June, the highest in two years. During the same period, daily imports from the United States rose to 439,000 barrels, marking a significant increase from May.
In May, India averaged 1.96 million barrels of Russian oil daily, but by the end of June, imports from West Asian nations were expected to dip below 2 million barrels per day.
As the world’s third-largest oil importer, India sources around 5.1 million barrels of crude daily, which it refines into petroleum products like petrol and diesel.
Market analyst Sumit Ritolia told The Economic Times that shipowners are increasingly reluctant to send empty tankers toward the Persian Gulf due to regional tensions, reducing the number of available tankers from 69 to just 40.
Since the onset of the Russia-Ukraine war in February 2022, India has dramatically expanded its oil trade with Russia. With Western sanctions squeezing Moscow out of European markets, Russian crude became significantly cheaper, presenting India with an opportunity it seized. Russia’s share of India’s total oil imports skyrocketed from less than 1% to between 40% and 44% in just a few years.
So far, the Iran-Israel conflict has not directly disrupted India’s oil supply. But analysts warn that a complete closure of the Strait of Hormuz would have severe consequences for the global energy market. The narrow passageway handles oil exports from major producers like Saudi Arabia, Iran, Iraq, Kuwait, the UAE, and LNG from Qatar. India currently depends on the strait for 40% of its oil and half of its natural gas imports.
Ritolia added that in the past two years, India has reshaped its oil import strategy, increasingly sourcing crude from Russian grades like Urals, ESPO, and Sokol, which avoid the Strait of Hormuz by traveling through the Suez Canal, around Africa’s Cape of Good Hope, or across the Pacific.
Indian refiners have also adapted by enhancing their flexibility in processing and pricing various crude grades. As a result, even traditionally expensive oil from the U.S., West Africa, and Latin America is now considered a viable alternative to ensure energy security amid geopolitical instability.