THE US-Israeli strikes on Iran and its Gulf-wide retaliation have rendered the Strait of Hormuz near-impassable, with Brent crude surging past $90 a barrel and global energy markets experiencing their most severe disruption since the 1970s. Given India’s heavy dependence on imported oil and gas, this poses an immediate challenge to our energy security, economic growth and household energy costs.
Nearly half of India’s crude imports transit the Strait of Hormuz, sourced from Iraq, Saudi Arabia, Kuwait and the UAE. Our gas dependence is even more concentrated: 53% of LNG imports and 90% of our LPG imports pass through the strait. Much of the Gulf’s output cannot reach global markets if the Strait of Hormuz is blocked. Saudi Arabia’s East-West pipeline to the Red Sea and the UAE’s Fujairah pipeline provide partial alternatives, but cannot compensate for a strait closure. The global oil market has little shock-absorbing capacity. Amid disruption fears, our government has prioritised LPG supplies to households, leaving commercial consumers, restaurants and food delivery services facing supply cuts and closure.
Against this backdrop, the US has provided India a 30-day sanctions waiver to purchase Russian crude already at sea. Ironically, Washington had for over a year been unfairly pressuring New Delhi to wind down its Russian crude purchases, imposing punitive tariffs on Indian exports, including a 25 percent charge pegged to our oil imports from Russia. By January 2026, Russian crude’s share of our import basket had slipped to 21%, the lowest since late 2022, while purchases from West Asia surged to multi-year highs.
Our cumulative savings from buying discounted Russian crude in 2022-2024 were an estimated $16.7 billion. Redirection of much of that demand to the Gulf increased our exposure to the Hormuz chokepoint. The lesson is not that Russian or Gulf oil is preferable; it is that over-dependence on any corridor or supplier is a liability.
India’s cumulative oil and gas investments in Russia constitute the largest share of our overseas hydrocarbon portfolio. By far, the largest amount of oil that our PSUs extract from overseas investments comes from Russia.
In turn, Russia-based Rosneft and its partners own and operate India’s second largest refinery and largest private sector fuel retail network. The Kudankulam nuclear power project and Gazprom’s contracted LNG deliveries to GAIL represent other major bilateral energy cooperation pillars.
Indian refiners have reportedly already secured around 30 million barrels of Russian crude since the waiver was issued, with roughly 9.5 million barrels on vessels near Indian waters. It is estimated that Russia could meet up to 40% of our crude requirements if Gulf supplies remain disrupted.
A larger principle is also at stake here. The speed with which Washington pivoted from penalising India for buying Russian oil to facilitating precisely those very purchases reveals how transactional that pressure was. The US tariff surcharge served as an instrument of leverage, deployed or withdrawn as per US convenience. India’s energy policy must not be subject to such whims. Our foreign policy draws on strategic autonomy and multi-alignment, and our energy procurement must reflect these principles.
The Hormuz crisis compels a frank appreciation of our situation. Besides crude oil and gas flows, 63% of our nitrogen fertiliser imports originate from the Gulf and transit Hormuz, exposing a double vulnerability. Whether energy security or food security, or sophisticated foreign weaponry and defence platforms, the pattern is of excessive external dependence.
While we work steadily towards reducing dependence in each of these crucial sectors, the practical solution lies in another spoke of our foreign policy approach: multi-alignment. Maintaining close, productive ties with major partners and ensuring that no external actor acquires disproportionate leverage over us builds the resilience that lets us exercise genuine strategic choice. Multi-alignment is the bridge to use as we progress towards self-reliance.
Indeed, we should apply multi-alignment while focusing on small modular reactors (SMRs) and work with the three nuclear powers — Russia, France and the US — to see that no country controls the fuel supply, technology pipeline or maintenance chain of our SMR future. A fast progression from technology transfer to co-production on Indian soil must also be put in place.
While India must fully exploit the current 30-day waiver window to bolster its energy security, we should have a long-term, integrated strategy. Energy procurement decisions should remain guided by price, quality, reliability, and our own assessment of supply security, not get misdirected by external political pressures. Diversifying energy sources and routes must remain a central priority to strengthen resilience against disruptions, market volatility and external pressures. We should accelerate expansion of our strategic petroleum reserves and keep them topped up to cushion future disruptions. Storage capacity for critical fuels, including LPG, must also be expanded. Investment in renewable energy should be viewed not only via a climate policy prism, but as a strategic imperative.
India’s energy diversification plans envisage 500 GW of renewable capacity by 2030, encompassing rapid expansion of solar power, developing offshore wind, biofuels, green hydrogen, and nuclear energy. These should be aggressively pushed to reduce our exposure to global oil markets.
India must also pursue pragmatic diplomacy, maintaining open channels with all major players. India has shown it can serve as a central node in a new energy geography, importing crude from multiple suppliers, efficiently refining it and exporting petroleum products. Managed prudently, this intermediate processing role can transform vulnerability into leverage.
Not so long ago, Washington was loudly threatening India with penalties for Russian oil purchases; last week, it issued a waiver to facilitate precisely those purchases. Such volatility reinforces the case for India to pursue a steady, national interest-driven energy policy. India is the world’s third largest oil consumer, fourth largest refiner and fifth largest exporter of petroleum products. Our scale provides leverage and our growing economy gives us standing. Both should be used to access energy on our own terms, rather than the shifting priorities of others. India’s energy policy must ultimately be guided by one principle: our own strategic calculus.
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