India has purchased around 30 million barrels of crude oil from Russia after the United States granted a temporary waiver allowing Indian companies to buy Russian cargoes loaded before March 5.
The move comes as the ongoing conflict involving Iran, Israel, and the United States has severely disrupted energy supplies in the region.
The waiver from Washington is aimed at helping countries like India manage the sudden supply disruption after the Strait of Hormuz — a critical shipping route for global energy — was effectively shut down.
Hormuz Disruption Blocks Key Oil Route
The Strait of Hormuz normally carries roughly 20 per cent of the world’s oil and gas shipments, including a large portion of India’s imports from major producers such as Saudi Arabia and Iraq.
With tanker movement through the route severely affected, Indian refiners have been forced to seek alternative supplies to keep fuel flowing into the country.
Industry estimates suggest that about 138 million barrels of Russian crude are currently at sea, creating a pool of cargoes that buyers are competing for. India is expected to face strong competition from other major consumers, particularly China, for these shipments.
Indian Refiners Rush to Secure Cargoes
Major refiners, including Indian Oil Corporation and Reliance Industries, have already moved to secure Russian cargoes in the spot market, according to shipping analytics firm Kpler.
State-run Indian Oil has reportedly bought around 10 million barrels, while Reliance has acquired a similar volume.
Some oil tankers that had initially signalled Singapore as their destination have now altered course towards Indian ports after the waiver made the cargoes viable for Indian buyers.
Unlike the heavy discounts seen earlier, Russian crude is now being sold at premiums of $2 to $8 per barrel over the Brent benchmark.
Oil Prices Swing Amid Uncertainty
The shift in buying comes amid uncertainty over how long the regional conflict may continue.
Comments by Donald Trump, suggesting that the war could end soon before later qualifying his remarks, contributed to volatility in global oil markets.
International crude prices on the Brent Crude benchmark dropped sharply from about $119 per barrel earlier in the week to around $88, reflecting changing expectations about supply disruptions.
India Had Reduced Russian Imports Earlier
India had gradually reduced its purchases of Russian crude under pressure from Washington after sharply increasing imports following Russia’s invasion of Ukraine in 2022.
At their peak in mid-2024, Indian refiners were importing more than 2 million barrels per day from Russia, taking advantage of steep discounts.
However, shipments had declined to roughly 1.06 million barrels per day last month, according to Kpler data, before the current supply disruption triggered renewed demand.
Government Invokes Emergency Gas Regulations
The oil scramble is unfolding alongside a wider energy crunch inside India.
The government has invoked the Essential Commodities Act, 1955, allowing authorities to regulate the distribution of natural gas across different sectors of the economy.
Under the newly issued Natural Gas (Supply Regulation) Order, 2026, the government has created a priority framework that determines which sectors receive gas first and which must operate with reduced supply.
Households and Transport Given Top Priority
Under the new system, essential services and households will continue to receive their full normal supply.
This includes piped natural gas to homes, compressed natural gas used by buses and taxis, gas used in producing cooking fuel such as LPG, and the fuel required to keep the country’s pipeline network functioning.
Fertiliser plants will receive about 70 per cent of their usual gas allocation, as the government aims to protect agricultural production ahead of the upcoming kharif season.
Industries Face Supply Cuts
Industrial consumers connected to the national gas grid, including manufacturing units and tea processing facilities, will receive roughly 80 per cent of their usual supply.
Commercial users supplied through city gas networks — such as restaurants, hotels and small businesses — will also receive about 80 per cent of their typical allocation.
Oil refineries, meanwhile, are expected to reduce their gas consumption to roughly 65 per cent of their recent average use.
To ensure enough fuel for priority sectors, the government has indicated that supplies to petrochemical plants, heavy industries and certain power stations will be curtailed first.
Push to Increase LPG Production
Authorities have also instructed refiners to boost domestic production of LPG and build emergency stockpiles.
Reliance Industries said it would maximise LPG output at its massive refining complex in Jamnagar Refinery Complex, the world’s largest integrated refining hub.
The company said maintaining uninterrupted access to essential fuels for Indian households remains a national priority.
LNG Supplies Also Under Pressure
Natural gas supplies are also tightening after Qatar, one of India’s largest suppliers, halted production following an Iranian drone strike.
To offset the shortfall, Reliance said it would divert gas produced from its KG-D6 Basin to support sectors identified as critical under the government’s priority framework.
India currently imports more than 90 per cent of its LPG from the Middle East, much of which normally passes through the Strait of Hormuz.
Summer Power Demand May Worsen Crisis
Energy experts warn that the LNG shortage could become more severe in the coming months as India enters what meteorologists predict may be an unusually hot summer.
Gas-fired power plants contribute only a small portion of India’s electricity supply but play a crucial role in meeting evening peak demand, when solar power generation declines but temperatures remain high.
Power demand could exceed 270 gigawatts this summer, potentially setting new records as millions of households rely on fans and air conditioners to cope with extreme heat.
If LNG supplies remain constrained, analysts warn that only a limited portion of gas-based power capacity may be available during peak demand periods, increasing pressure on the country’s energy system.
