Oil Supply to India: Oil prices rose sharply Monday as disruptions in tanker traffic through the Strait of Hormuz chokepoint raised uncertainty about how US and Israeli attacks on Iran would affect supply to the world economy. US oil traded 7.4 per cent higher at USD 71.97 per barrel, while international standard Brent was up 7.7 per cent at USD 78.46 per barrel.
India Holds Emergency Talks on Supply Disruption
Meanwhile, Indian state refiners and government officials reportedly met over the weekend to hammer out contingency plans for a crisis in Iran that has all but stopped flows through the Strait of Hormuz, a narrow waterway vital for roughly half of the nation’s oil imports.
According to a Bloomberg report, the world’s third-largest oil importer is considering options that include turning to Russian cargoes currently loitering near its waters, according to people familiar with the discussions.
India Holds Emergency Talks on Supply Disruption
Notably, Russia has remained India’s top crude oil supplier, followed by Iraq and Saudi Arabia, as per the global crude sourcing mix for Dec’25–Jan’26.
India became the single most important buyer of Moscow’s seaborne crude after the invasion of Ukraine, but the country has been cutting back in response to US pressure – particularly after a US trade deal struck last month that rolled back punitive tariffs, the report pointed out.
India has since kept Russian oil purchases to a minimum, and in February loaded just over 1 million barrels a day – roughly half of the amount imported at the peak, and the lowest level since September 2022. Much of that shortfall has been filled with Middle Eastern barrels.
Stockpiles and Diplomatic Pressure
Oil ministry officials – indicating India has supplies that could last up to two weeks, between commercial and state reserves -are now pushing for the Ministry of External Affairs to seek some room for maneuver from Washington. As of late last week, there were 9.5 million barrels of Russian oil sitting in Asian waters, the report said.
In a post on X on Monday, India’s oil ministry said it continues to monitor the situation and that “all steps will be taken in order to ensure availability and affordability of major petroleum products in the country.”
Diversifying Supply and Strategic Options
Processors also have a limited number of other alternatives, including tapping India’s strategic petroleum reserve, fast-tracking supplies from Venezuela and pushing domestic producers to raise output, the people said, asking not to be named as the conversations are not public. They added refiners were also asking Saudi Aramco to ship more crude via pipeline to the Red Sea port of Yanbu, which would avoid Hormuz.
Potential Domestic Measures if Crisis Worsens
Should the crisis drag on and continue to curb flows, the government could consider curbing fuel exports to secure enough supply for domestic consumers, people told Bloomberg. It can prioritise household gas and piped supplies, potentially directing industrial users to switch fuels.
Officials could also press private giant Reliance Industries Ltd. to divert more fuel to the domestic market, while other refiners tweak output to maximise liquefied petroleum gas production at the expense of products such as naphtha, Bloomberg quoted people familiar with the matter as saying.
About 2.5 million to 2.7 million barrels a day of India-bound crude pass through Hormuz, according to Kpler. Nearly two-thirds of LNG shipments and about 95% of LPG supplies also come from Middle East, mostly through the chokepoint.
