As Strait Risks Surge and Brent Spikes, New Delhi Leans on Russian Crude, Diversification and Strategic Buffers.
Forty percent of India’s oil passes through Hormuz. Brent touched $119. Russia fills the gap. Can New Delhi outmaneuver a world of chokepoints?
When Brent crude surged above $100 and briefly touched $119 amid escalating tensions around the Strait of Hormuz, India’s energy strategy faced its most serious stress test in years.
For New Delhi, the challenge is stark. Roughly 40% of India’s crude imports typically move through the Strait of Hormuz — a chokepoint that handles about one-fifth of global petroleum flows. With oil imports covering nearly 88% of domestic demand and monthly petroleum consumption hovering around 20 million tonnes, even modest spikes in freight, insurance or benchmark prices can ripple quickly through inflation, fiscal balances and household budgets.
Yet the shock has not translated immediately into higher fuel prices at the pump. State-run oil marketing companies are absorbing part of the volatility, drawing on financial buffers built during earlier periods of lower crude prices. That cushion buys time — not immunity.
India’s deeper response has been structural rather than reactive: diversification.
Before 2022, Russian crude accounted for about 2% of India’s imports. By mid-2023, it had climbed to roughly 40% at times, as discounted Urals barrels improved refinery margins and softened the import bill. Bilateral trade between New Delhi and Moscow expanded sharply, with energy at the core. Crucially, this shift did not displace Gulf suppliers. Iraq, Saudi Arabia, Kuwait and the UAE still make up a substantial share of India’s crude basket, alongside purchases from the United States, West Africa and Latin America.
The result is not reduced dependence, but greater optionality — the ability to pivot when one corridor tightens.
Recent reports suggest Indian refiners have secured additional Russian cargoes to offset Middle Eastern disruptions. Some of these flows bypass Hormuz entirely, traveling via longer Atlantic or Arctic routes. They are costlier and slower, but they diversify risk.
Strategic petroleum reserves — roughly 5.33 million tonnes in capacity — and commercial stocks offer limited but meaningful breathing room. New Delhi has so far judged them sufficient, opting not to join coordinated emergency releases under the International Energy Agency.
Instead, officials appear to be betting on supply flexibility and diplomatic maneuvering.
That diplomacy is deliberately broad. India maintains engagement with Gulf producers, deepens ties with Moscow, works within the G20 framework and expands renewable investments at home. The objective is not alignment with one bloc, but insulation from systemic shocks.
The episode underscores a shift in oil geopolitics. Today’s risk is less about absolute scarcity and more about route insecurity — shipping lanes, war-risk premia and sanctions compliance. Insurance costs have climbed; tanker routes have grown unpredictable.
At the same time, India’s importance to global oil demand is rising. The International Energy Agency projects that India will account for more than one-third of net global oil demand growth this decade, adding roughly 1 to 1.2 million barrels per day by 2030.
That demand weight gives New Delhi leverage — but also exposure.
In a fragmented energy order defined by sanctions, maritime chokepoints and geopolitical rivalry, India is not seeking ideological alignment. It is practicing risk management at scale. Between Hormuz and Moscow, the strategy is simple: keep the barrels flowing, keep prices contained, and avoid being trapped by any single corridor or coalition.
