Hormuz Disruption Forces Major Shift in India's Oil Imports

The conflict between the US and Iran has significantly altered India's energy supply. In March 2026, the country's crude oil imports dropped sharply. This was a direct result of the Strait of Hormuz being closed for an extended period. The Strait is a vital route for global energy transport. The disruption forced India to reduce its purchases from Middle Eastern countries and rely much more on Russia, even while dealing with international sanctions and fluctuating prices.

March Oil Imports Fall Sharply on Lower Volume, Higher Prices

India's crude oil imports in March 2026 fell by about 17% compared to the previous year, totaling 18.9 million metric tonnes (MMT), down from 22.8 MMT. Despite the lower volume, the import bill decreased by 4.9% to $11.7 billion. The average price for India's crude basket jumped to $113.49 per barrel in March, significantly higher than $69.01 in February and $72.47 a year earlier. This price increase was driven by the conflict, which pushed Brent crude prices above $100 per barrel and as high as $126. The Strait of Hormuz, which handles about one-fifth of global oil, saw traffic drop by up to 97%. As a result, Middle Eastern oil accounted for only 26.3% of India's imports in March, with oil from Iraq and the UAE reaching multi-year lows.

Russia Becomes Top Supplier as Middle East Shipments Collapse

With less oil coming from the Middle East, imports from Russia more than doubled in March 2026 to about 2.25 million barrels per day (bpd), making Russia India's largest oil supplier. For the full fiscal year ending March 2026, Russian oil imports were down slightly by 6.2% year-on-year, partly due to India's efforts to align with Washington on trade. This March surge from Russia contrasts with China, which saw its overall crude imports fall 2.8% but increased Russian imports by 14% that month. While Russia's larger share, now around 44.4% of India's March imports, provides benefits like discounts, relying more heavily on this one supplier creates new geopolitical risks. Russia's share of India's oil imports has grown significantly from less than 1% before 2022 to over 37% by 2024.

Increased Reliance on Russia Carries Strategic Risks

Shifting towards Russia, while a practical solution for immediate supply needs, brings significant strategic dangers. Relying too heavily on one supplier outside the main Middle Eastern sources makes India vulnerable to new sanctions, complex compliance rules, and potential supply cutoffs if tensions around Russia increase. The reduced share of Middle Eastern oil also risks damaging long-standing diplomatic and economic relationships with key OPEC countries, potentially affecting future energy deals and bargaining power. Additionally, the use of 'shadow' tankers and intermediaries to trade Russian oil, while keeping supplies moving, creates obscurity and regulatory challenges for Indian refiners trying to avoid U.S. attention.

Energy Security Faces Test Amid Geopolitical Uncertainty

India's strategy for energy security, which aims for diverse sources, was severely tested in March. Although India imports oil from over 40 countries, the March crisis showed how vulnerable the nation is to disruptions at key transit points and geopolitical flashpoints. Analysts believe Russia will likely remain India's main oil supplier because of its competitive prices and more stable shipping routes that avoid the Strait of Hormuz, despite the existing risks. This event highlights that true energy security requires not only varied import sources but also strong backup plans and the ability to withstand increasing global geopolitical uncertainties.