India Increases Oil Imports from Russia, U.S. Amid Iran-Israel War
The Iran-Israel conflict, which escalated sharply in mid-June 2025, has caused significant disruptions in global crude supply chains. In response, India ramped up oil imports from both Russia and the United States, seeking to stabilize domestic fuel supply and manage import costs amid volatility in the Middle East.
According to preliminary trade data, India’s oil imports from Iran have dropped to near-zero, while volumes from Russia and the U.S. saw a sharp uptick in the second half of June.
Why the Shift?
1. Geopolitical Risk in the Strait of Hormuz
The Iran-Israel conflict has increased security threats around the Strait of Hormuz, a key oil shipping chokepoint. Rising tanker insurance costs and rerouted shipping have made West Asian oil riskier and more expensive.
2. Energy Security Concerns
India, which imports over 85% of its crude oil, is vulnerable to price shocks. To reduce supply risk, the Indian government instructed refiners to diversify and lean on suppliers with lower geopolitical exposure.
3. Russian Discounts and Stable U.S. Supply
Russia continued offering crude at discounted prices despite Western sanctions.
The U.S., though more expensive, offers stable supply routes and long-term contracts.
Market Impact in India
Fuel prices remained volatile in June but stabilized in late weeks due to strategic procurement.
The rupee remained under pressure due to higher import bills, although forex reserves helped offset the blow.
Oil marketing companies (OMCs) like IndianOil and BPCL benefited from diversified sourcing and improved refining margins.
Government & Industry Statements
Indian Petroleum Ministry officials confirmed the shift was “a proactive response to geopolitical uncertainties” and assured “no short-term fuel shortages.”
Refiners such as Reliance Industries and Indian Oil Corporation are reportedly revising their procurement mix for Q3 2025.
❓ Frequently Asked Questions (FAQ)
Q1: Why is India importing more oil from Russia and the U.S. now?
The Iran-Israel war has increased supply risks and shipping costs in the Middle East. To ensure uninterrupted supply, India diversified its imports toward safer and discounted options like Russia and the U.S.
Q2: Has India stopped importing oil from Iran?
Yes. Due to the war and logistical risks, imports from Iran have dropped significantly. India is focusing on less volatile suppliers.
Q3: Is the shift affecting fuel prices in India?
Initially, yes. Prices spiked in early June. However, increased Russian and U.S. imports helped stabilize fuel prices by late June.
Q4: Is this shift permanent?
Not necessarily. India’s oil strategy is dynamic. Once tensions ease, procurement may rebalance. But long-term diversification is a clear policy goal.
Q5: Are Indian refiners equipped to handle U.S. and Russian crude?
Yes. Most Indian refineries have been upgraded to handle multiple crude grades and have previously processed Russian and American blends efficiently.
Published on: June 22, 2025
Uploaded by: PAVAN
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