Last week’s Brent crude oil price chart is displayed on a mobile screen in this photo illustration, as prices fluctuate amid concerns over the escalating conflict involving Iran and global supply disruptions, in Brussels, Belgium, on March 2, 2026.
Jonathan Rae Nurfoto | getty images
India, even though it is inclined towards the US, is increasingly realizing that Washington’s policies are harmful to it, especially in matters of energy security. The Iran war has made this issue more serious.
The US on Monday began blocking ships from entering or exiting Iranian ports through the Strait of Hormuz – one of the world’s most important oil chokepoints – in a bid to pressure Tehran after peace talks failed.
Experts said the move dealt a blow to New Delhi, which imported its first Iranian oil shipment in seven years as it struggles to meet energy needs amid the Iran war. Adding to tensions, a U.S. waiver allowing countries to buy Russian crude expired on April 11, eliminating another key source of energy supply as global markets remain tight.
Mukesh Sahdev, chief oil analyst at energy intelligence firm
India imports more than 85% of its crude oil needs – about 5.5 million barrels per day – Making it the world’s third largest oil importer. According to Sahdev, the country has already lost about 3 million barrels per day of crude that previously transited through the Strait of Hormuz, forcing refiners to scramble for alternative supplies, particularly from Russia.
Sahdev said India is in a much more vulnerable position if disruptions in crude oil supplies continue. Unlike China – which has about 300 days of oil reserves – India has reserves of about 160 million barrels, which represents a limited buffer of about 30 days against prolonged supply shocks.
Although fuel pumps are not running out, the impact of the Middle East conflict is already visible on key macroeconomic indicators. Last month, HSBC’s flash Purchasing Managers’ Index showed that India’s private sector activity fell to its lowest level since October 2022 in March due to weak domestic demand.
Companies surveyed cited the Middle East conflict, volatile market conditions and rising inflationary pressures as factors impacting growth. A few days later, India’s Finance Ministry also issued a warning that the 7.0%-7.4% growth forecast for the fiscal year ending March 2027 faces “substantial downside” risks due to rising energy costs and supply chain disruptions linked to the Iran war.
Strategic autonomy?
The current crisis underlines a broader challenge for India as it tries to balance its economic and energy needs with US strategic expectations. Experts say New Delhi has long advocated strategic autonomy, especially in energy security, but recent US actions have limited its room for manoeuvre.
The strategy unraveled after Middle Eastern supplies were disrupted following the outbreak of war in the region, pushing India back to Russian crude amid rising fuel prices and tight global markets – only for US rebates to expire this month.
“I feel bad for the Indian government,” said Sameer Kapadia, managing principal of Vogel Group, speaking on CNBC’s Inside India. He said Indian policymakers are being repeatedly told by Washington whether they can buy energy supplies from Russia or Iran.
“They are trying to balance the expectations of the United States at this point,” Kapadia said. “No path is easy for India.”
India bought 1.5 million barrels per day of Russian crude oil in March after the US offered a specific waiver of 30 days to allow purchases to resume, according to data shared by energy intelligence firm Rystad Energy. A week later, Washington temporarily authorized purchases of all offshore Russian oil to stabilize energy markets, suspending sanctions imposed after Russia’s invasion of Ukraine.
That authorization expired on April 11, and experts say a lapse could send oil prices soaring, potentially forcing Washington to extend the waiver in an effort to cool markets.
“The market is already under pressure, and India is hoping that this relaxation will be extended,” said Pankaj Srivastava, senior vice president at energy research firm Rystad Energy.
For now, the government is trying to minimize the immediate risks. On Monday, the Ministry of Petroleum and Natural Gas said that “all refineries were operating at high capacity The stock of raw materials was sufficient.” The ministry did not respond to CNBC’s requests for further comment.
