• Russia remains India's largest crude supplier at over 1 million barrels per day in February 2026, though imports dipped from January levels amid U.S. pressure.
  • Saudi Arabia surged 30% month-on-month to over 1 mbd, narrowing the gap as refiners pivoted toward Gulf sources, but Middle East conflicts are driving contingency planning for increased Russian purchases.
  • India's oil import basket has shifted toward West Asia, raising vulnerability as Gulf crude's share grew, with ongoing disruptions in the Strait of Hormuz threatening key supply routes.

Russia has maintained its position as India's top crude oil supplier, with imports holding at just over 1 million barrels per day in February 2026, according to recent trade data. This comes despite a reduction from 1.1 mbd in January, driven by U.S. sanctions covering nearly 70% of Russian crude and a tariff deal requiring India to cut Russian purchases in exchange for lower U.S. tariffs on Indian goods. The redirected flows have primarily gone to China, which absorbed an extra 0.5 mbd, according to people familiar with the matter.

In a notable shift, Saudi Arabia's supplies to India jumped 30% month-on-month to over 1 mbd in February—its highest in nearly six years—narrowing the gap with Russia as refiners pivoted toward Gulf sources. However, ongoing conflicts in West Asia, including strikes disrupting the Strait of Hormuz, which carries 2.5–2.7 mbd of India's imports, have led to contingency planning for increased Russian crude. Efforts to restructure India's import strategy have hit a snag, with government reviews by Oil Minister Hardeep Puri emphasizing monitoring for affordability amid these geopolitical tensions.

Without a deal to secure alternative supplies, India could face significant disruptions, prompting measures such as export curbs on fuels and LPG rationing. Refiners like BPCL (BPCL.NS) and HPCL (HINDPETRO.NS) are boosting LPG output in response, with potential rationing for alternative-fuel users and fuel export curbs affecting a third of petrol, a quarter of diesel, and half of ATF exports. A source close to the discussions noted, "The situation is fluid, and we're exploring all options to maintain energy security," though attempts to reach officials for further comment were unsuccessful.

Market data shows Brent crude spiked to $80 per barrel, up 10%, and European gas prices rose over 40% due to Middle East disruptions, pressuring India's limited reserves of 17–18 days for crude and 20–21 days for petrol and diesel. J.P. Morgan forecasts Brent at an average of $60 per barrel in 2026, bearish due to resilient Russian exports at steeper discounts, reinforcing that Russian Urals remains margin-friendly compared to U.S. and Middle East alternatives. This dynamic could strain U.S.-India ties if Russian purchases rise, reopening diplomatic issues tied to the February tariff deal, though India insists its decisions are commercial.

Looking ahead, prolonged closure of the Strait of Hormuz—potentially up to 4 weeks, as suggested by recent assessments—could force 10–30% supply cuts, redirecting Russian cargoes already at sea and potentially softening the U.S. stance amid tight global supply. In the long term, India is likely to sustain Russian imports at 0.8–1.0 mbd due to pricing advantages, with China absorbing any excess, as sanctions increase Russian logistical costs but exports remain resilient. The broader trend includes rising Saudi supplies and potential offsets from Venezuela, but Russian oil continues to offer a competitive edge in this volatile landscape.

*Correction: An earlier version misstated the month-on-month change in Saudi supplies; it has been corrected to 30%.