- India is fast-tracking contracts to diversify crude oil and LPG imports amid global supply challenges
- Russia remains a key supplier despite US sanctions and conditions on Indian purchases
- Oil supply through the Strait of Hormuz, crucial for India, is constrained by the US-Israel-Iran conflict
India has fast-tracked signing of contracts to diversify import of crude oil and LPG, industry sources told NDTV Thursday.
Sources said contracts are being finalised after 'detailed negotiations on rates that suits India's economic interests'.
The list of potential suppliers includes Russia, from whom India bought large amounts of discounted crude - immediately after its war on Ukraine began and Moscow faced sanctions - till those purchases were reduced per terms set by the United States.
The US - which had expressed reservations over India buying Russian oil, arguing it was helping fund the war on Ukraine - made reduction a condition to sign February's interim tariff deal. India agreed to offset the reduction by buying from the US.
But the US-Israel war on Iran that began Feb 28 sent oil prices soaring and constrained supply lines after Tehran shut down tanker traffic through the Strait of Hormuz, a critical chokepoint for 20-25 per cent of the world's seaborne crude trade.
Saudi and UAE pipelines offer marginal relief for Hormuz oil chokehold.
The Hormuz channel is a key supply route for India; an estimated 40 per cent of the country's massive oil needs, between 5.5 and six million barrels per day, came through that passage.
Then, on March 6 Washington gave Delhi 30-day 'permission' to buy Russian oil that had already been loaded on ships to offset loss of supply from the Middle East. Bloomberg said India have already bought an estimated 60 million barrels (article behind paywall) from Russia to be delivered in April 2026.
The government has stressed there is no immediate shortage of either fuel or gas.
The country's three strategic reserves currently hold an estimated 3.372 million tons - or two-third its maximum capacity - junior Petroleum Minister Suresh Gopi told Parliament this week.
In addition, current total reserves - i.e., SPRs, which hold unrefined or crude oil, and ready-to-use fuel - are at 74 days, Gopi said, "... which includes stores with oil marketing companies".
RECAP | How Much Crude Oil Reserve Does India Have? What Union Minister Said
Earlier Prime Minister Narendra Modi said: "In the last 11 years, we have diversified energy imports... earlier we used to import from 27 nations. Now we import from 41."
On the supply of LPG, i.e., liquified petroleum gas used to cook food by over 33 crore Indian households, the government said early March it had ordered a 25 per cent increase in domestic production and that there is no need for panic buying.
RECAP | LPG Production Up 25%, Government Says Amid Shortage Reports
Assurances followed reports of hotels and restaurants shutting down due to commercial LPG shortage.
Meanwhile, Washington has also issued a 30-day waiver from purchasing sanctioned Iranian oil, though this again only applies to crude already stored on ships and specifically on or before March 20, 2026.
All such cargo must be discharged, i.e., be unloaded, by April 19.
Kpler, which provides real-time markets and commodities analytics, said the waivers will release around five million barrels per day within a month, but warned it still would not offset sustained disruptions in supply from the Middle East.
RECAP | Hormuz Shutdown Affects Asia's Crude Oil Supply, Pipelines Can't Cover Loss
This is because payment constraints and shadow fleet risks will limit rapid uptake.
Cumulative oil losses have hit 133 million barrels since the war began, Kpler said, warning also that it could reach 600 million barrels by end-April if flows do not resume.
Outages hit 10.7 million barrels per day, possibly 11.5 by late-March as a result of the fighting and pressure on the Hormuz, with damage to refineries and depots courtesy strikes from both US-Israel and Iran exacerbating the situation.
