India Pivots to Non-Strait Oil Sources Amid Escalating Iran-Israel Conflict

According to top government sources, refineries have deferred planned maintenance shutdowns and are maintaining normal processing rates to create buffers that could meet the country's requirement in the near term. Sensing some disruption of crude supply due to the partial halt in tanker movements through the strategic waterway — the Strait of Hormuz, the government also said that it would depend on non-strait sources to meet its oil demand.

“Non-strait sources are fully operational and we are sourcing more and more supplies from non-conflict zones. These sources of supply accounted for over 60 per cent of supplies in 2025 which after the Middle East conflict climbed to 70 per cent,” the sources said.

India imports about 88 per cent of its crude oil, with roughly half of those supplies in February passing through the Strait of Hormuz, the narrow sea-lane between Iran and Oman that serves as a key energy transit route for global markets. But the recent military strikes by the US and Israel on Iran followed by Tehran’s retaliation have sharply escalated tensions in the region, hurting the oil supply in some way or the other.

“Indian refiners are tapping crude from West Africa, Latin America, the US and other reliable sources to meet the country’s demand. Even the US treasury department has also allowed a 30-day waiver for the sale and delivery of sanctioned Russian oil that has already been loaded on vessels to India has opened up another avenue,” the source said.

The waiver permits the sale, delivery or discharge of crude oil and petroleum products of Russian origin that were loaded onto vessels on or before March 5, including ships subject to certain sanctions. The exemption remains valid until April 5, allowing cargoes already in transit to be completed without violating sanctions restrictions.

There were 120 million barrels of Russian crude on the water. Of this, as many as 15 million barrels of Russia-origin crude are sitting on tankers close to India - in the Arabian Sea and Bay of Bengal - while another 7 million Russian crude barrels are idling near Singapore.

Industry insiders, however, said that Indian refiners have started buying Russian oil. “Reliance Industries, Hindustan Petroleum Corporation Ltd and HPCL-Mittal Energy Ltd, which had halted purchases of Russian crude following US sanctions imposed last year on Moscow's leading producers Rosneft and Lukoil, have returned to the market to secure Russian cargoes,” they said.

The oil ministry official also said that India never stopped buying Russian oil - it imported some 1.04 million barrels per day of Russian crude in February, down from 1.6-1.8 million bpd levels seen in 2023-2025. “We are in a very comfortable position as far as crude and finished products are concerned," he said, adding the combined inventory can meet the country's demand for 50 days.

According to petroleum ministry data, India's strategic petroleum reserves have the capacity to cover about 9.5 days of net oil imports. “In addition, state-run oil companies have storage for crude and petroleum products equivalent to 64.5 days of net imports, taking the country's total storage capacity to roughly 74 days of net imports,” the ministry said.

Analyst, however, said that the higher prices would add to India’s import bill and sourcing from non-Middle Eastern suppliers mean longer shipping and higher freight. Also, insurance premiums have jumped. “Every $10 increase in crude prices could add 20-25 basis points to the consumer price index if passed on to consumers, or widen the fiscal deficit if taxes are cut to neutralise the impact,” they said