India's Strategic Adaptation Amid US-Iran Conflict and Oil Supply Disruptions
US-Iran war, Hormuz closure and oil crisis: How India is managing fuel flows
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The ongoing conflict in West Asia has disrupted global energy supply chains, particularly affecting oil transport through the Strait of Hormuz. India, reliant on imports for nearly 90% of its crude oil, has managed to stabilize its fuel supply through diversification of sources, increased imports from non-traditional suppliers, and strategic adjustments in refining practices.
- 01India maintains approximately 60 days of crude oil supply through strategic reserves and commercial inventories.
- 02Since March 2026, India's crude import strategy shifted significantly, with increased purchases from the United States, Brazil, and Russia.
- 03Russian oil now constitutes about 30-37% of India's total crude imports, averaging 1.5 to 1.7 million barrels per day.
- 04Alternative supply routes have been utilized, such as Saudi Arabia's East-West pipeline, to bypass the Strait of Hormuz.
- 05The Indian government has increased retail fuel prices and imposed a windfall gains tax to manage domestic fuel availability.
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The conflict in West Asia, which escalated on February 28, has severely impacted global energy supply chains, particularly through the Strait of Hormuz, a critical route for crude oil transport. In response, India, which imports nearly 90% of its crude oil, has successfully maintained supply stability by diversifying import sources and adjusting refinery operations. Currently, India holds about 60 days of crude oil supply, combining strategic reserves and commercial inventories. Following disruptions in the Hormuz region, Indian refiners have shifted their import strategy significantly since March 2026, increasing purchases from non-traditional suppliers such as the United States, Brazil, and Russia. Russian crude has become a major component of India's energy mix, accounting for 30-37% of total imports, with levels reaching around 1.5 to 1.7 million barrels per day. To mitigate the impact of the conflict, India has also started utilizing alternative supply routes, including Saudi Arabia's East-West pipeline, which bypasses Hormuz. However, imports remain about 700,000 to 800,000 barrels per day below normal levels. To ensure domestic fuel availability, the Indian government has raised retail fuel prices and imposed a windfall gains tax, balancing refinery economics with consumer needs.
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The increase in retail fuel prices may lead to higher transportation and commodity costs, affecting consumers and businesses across India.
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