Oil
Amid the intensifying Israel–Iran conflict in June 2025, India has dramatically reconfigured its oil supply strategy, raising its imports from Russia and the United States to fortify energy security and insulate itself from Middle East volatility.
🔥 Geopolitical Catalyst
The conflict, which began in mid-June with Israel’s airstrikes on Iranian nuclear and military sites—including Natanz and Fordow—and escalated with U.S. strikes directly targeting Iranian facilities , heightened fears over disruptions at the Strait of Hormuz. This strategic waterway handles nearly 20% of global oil exports, and Iran has threatened to close it in retaliation Although a full closure remains unlikely, the mere threat stoked oil price volatility and prompted nations worldwide to reassess supply lines.
India’s Strategic Pivot
Historically, India has relied heavily on Middle Eastern producers like Saudi Arabia, Iraq, the UAE, and Kuwait—accounting for nearly half of its crude imports. In June, total imports from the Gulf fell to roughly 2.0 million barrels per day (bpd), down from May. In response, Indian refiners ramped up imports from Russia and the U.S. as a contingency.
Russian oil surged to 2.1–2.2 million bpd in June, the highest monthly volume in two years and exceeding combined Gulf imports. Supplies in May had already been high at 1.96 million bpd. This surge underscores India’s pivot toward discounted Russian Urals crude — a trend ignited by Western sanctions following Russia’s 2022 invasion of Ukraine, which elevated Moscow as India’s largest oil supplier .
Simultaneously, U.S. crude imports jumped nearly 57%, increasing from 280,000 bpd in May to 439,000 bpd in June . This diversification aligns with refiners’ efforts to maintain flexibility and hedge against regional supply shocks.
Supply Dynamics & Infrastructure
Reuters reports indicate that while global oil flows remain unaffected, tanker movements from the Gulf have slowed significantly, and vessel “ballasters” into the region dropped from 69 to 40 ships . This reduced loadings forecast possible tightening of Gulf-origin crude in the near term.
India is well-positioned to manage such disruptions. Its diversified import routes include Russian supply via the Cape of Good Hope and Suez Canal, and U.S./Atlantic Basin shipments via the Panama Canal. Indian refiners are also eyeing alternatives from West Africa, Brazil, and Nigeria.
Furthermore, India retains a strategic petroleum reserve sufficient for approximately nine to ten days of imports —a critical buffer amid emergent supply concerns.
Market Impacts & Price Volatility
The Middle East crisis triggered a sharp jump in global oil prices—Brent crude surged roughly 7–11%, threatening to climb past $100–150 per barrel if the Strait of Hormuz were shut. The Indian rupee took a hit, dipping to a three-month low of ₹86.72 per dollar, as markets braced for potential escalation. Analysts warn that a $10 per barrel rise could widen India’s current account deficit by up to 0.4% of GDP.
These conditions may prompt the government to use strategic reserves or implement fuel subsidies to cushion domestic prices.
Long-Term Strategy & Energy Security
India’s June imports tell a story of deliberate, not panicked, strategic positioning. The nation is actively reducing dependency on Gulf oil, bolstering its resilience with Russian and U.S. alternatives while exploring African and Latin American options.
In parallel, refiners are likely to reduce Gulf oil nominations in July, favoring spot sales from non-Middle Eastern sources to minimize risk and cost
Despite the Strait’s importance, studies suggest that even if Iran attempted a brief closure, disrupting 18–19 million bpd, such an action would hurt Iran’s own exports and strain its economy—even straining its crucial trade with China Meanwhile, India’s alternative supply engagement renders it less vulnerable.
Broader Implications & Outlook
- Energy security: India’s ability to pivot quickly highlights its growing energy autonomy.
- Economic resilience: By tapping reserves and exploring supply diversity, India is buffering inflationary pressures on petrol, diesel, and LPG.
- Strategic diplomacy: Strengthening oil ties with Russia and the U.S. bolsters India’s geopolitical leverage while easing its Middle East reliance.
- Global markets: India’s mass rerouting contributes to realignment in tanker logistics, insurance premiums, and refined product trade—impacting Europe and Asia alike
What Lies Ahead?
If the Iran–Israel conflict deepens or the Strait is threatened again, India’s energy pivot will be tested. Continued diversification—to Russian, U.S., West African, and Latin American oil—will be paramount to avoid congestion and volatility. Infrastructure, such as expanded strategic reserves and refining capability, will play a key role.
In summary, India’s June surge in Russian and U.S. oil imports amid the Iran–Israel war reflects a carefully calibrated strategy: maintain energy flow, hedge against geopolitical risk, shield the economy, and assert a secure and sovereign path in global energy dynamics.
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