Source Credit : Portfolio Prints
India has resumed oil and gas purchases from Iran after a seven-year pause, as supply disruptions and soaring energy prices—triggered by the U.S.-Israel conflict with Iran—force New Delhi to secure alternative sources.
The renewed imports, the first since 2019 according to Rystad Energy, may not provoke an immediate response from the United States. However, analysts say the move signals India’s effort to recalibrate its strategic relationship with Tehran while maintaining geopolitical flexibility.
On Saturday, India’s Ministry of Petroleum and Natural Gas said refiners had sourced crude from over 40 countries, including Iran, to offset disruptions linked to the Middle East crisis. The ministry added that payment channels remain intact and confirmed the arrival of a shipment carrying 44,000 metric tons of Iranian liquefied petroleum gas (LPG) at a southern port.
Analysts describe the purchases as a calculated diplomatic signal. “It’s a confidence-building mechanism with Tehran,” said Arpit Chaturvedi of Teneo, noting that the imports serve as an “insurance policy,” reinforcing India’s position of neutrality in the conflict.
In exchange, India is seeking assurances from Iran for the safe passage of its vessels through the Strait of Hormuz—a critical chokepoint through which roughly half of India’s crude oil and most of its LPG supplies transit.
As the world’s third-largest oil importer and second-largest LPG consumer, India remains highly exposed to disruptions in the strait, making supply security a top priority.
According to Amitendu Palit of the Institute of South Asian Studies, the purchases are facilitated by a U.S. waiver permitting limited imports of Iranian crude. However, he cautioned that future volumes will hinge on whether sanctions are reimposed and how regional tensions evolve.
Despite historically close ties with Tehran, perceptions are growing that India has leaned closer to Washington since the outbreak of the Middle East conflict—making the latest move a subtle but significant recalibration.
Shipping data underscores the urgency. Seventeen Indian-flagged vessels are currently awaiting safe passage through the strait, while seven have successfully transited in recent weeks following diplomatic engagement with Iran—highlighting India’s willingness to set boundaries in its alignment with the U.S.
“The assumption that the U.S. is a dependable partner in moments of crisis has been tested repeatedly,” said Reema Bhattacharya of Verisk Maplecroft. She added that India is likely to diversify strategic partnerships beyond the current conflict.
That approach is evident in New Delhi’s decision to pursue bilateral arrangements with Iran rather than join a U.S.-led naval coalition proposed by Donald Trump to secure shipping routes in the region.
“Choosing bilateral engagement over participation in the coalition is a deliberate act of distance,” Bhattacharya said, reflecting India’s pragmatic energy strategy and reluctance to be drawn into a broader conflict.
This balancing act follows renewed trade friction with Washington. Last year, the Trump administration imposed a 25% tariff on Indian exports and accused New Delhi of indirectly supporting Russia’s war in Ukraine by importing discounted crude.
In response, India reduced its reliance on Russian oil and increased imports from the Middle East. But the outbreak of war disrupted those flows, forcing a return to Russian supplies amid tightening global markets and rising prices.
Data from Kpler shows India’s imports of Russian crude climbed to around 1.9 million barrels per day by March 24, up from roughly 1 million barrels per day in February—despite a sharp rise in overall procurement costs.
According to Rystad Energy, the average price of India’s crude basket surged from $69 per barrel in February 2026 to $113 in March, underscoring the financial strain caused by volatile global energy markets.
