• Russia stands ready to increase crude oil supplies to India if disruptions in the Strait of Hormuz escalate, offering a key contingency option.
  • India's refiners are preparing emergency measures including potential fuel export curbs and LPG rationing as Gulf supplies face significant risks.
  • Recent US sanctions on Russian firms have not halted India's imports, with flows continuing via trade loopholes amid strong bilateral ties.

Energy Lifeline in the Balance

Russia is positioned to ramp up crude oil deliveries to India as military actions in West Asia threaten to choke off shipments through the critical Strait of Hormuz, according to people familiar with the matter. Indian officials are actively considering this option as a primary contingency measure, with refiners like Indian Oil, BPCL, and HPCL already drafting plans to adjust supply chains.

"We are monitoring the situation closely and reviewing all measures to ensure supply affordability," Oil Minister Hardeep Puri said recently, though his office declined to comment specifically on Russian backup plans when reached. The preparations come as strikes on Iranian targets and retaliatory threats have halted much of the liquefied natural gas and liquefied petroleum gas traffic through the strait, with tanker movements becoming sparse over the past week.

India's reliance on Gulf suppliers—including Iraq, Saudi Arabia, the UAE, and Kuwait—for roughly 2.5 to 2.7 million barrels per day of crude leaves it particularly exposed. Current strategic reserves cover just 10 to 21 days depending on the product, with LPG stocks at less than two weeks. That vulnerability has officials scrambling behind the scenes, even as public statements emphasize calm.

Market Realities and Geopolitical Calculations

Brent crude has already climbed about 10% to hover near $80 per barrel since the latest escalations, while LNG spot prices could surge 130% to $25 per MMBtu if disruptions persist for a month. Such moves would strain India's current account and hit energy-intensive sectors hard. Yet the crisis also presents an opportunity for Moscow to reinforce its role as New Delhi's energy partner of choice.

India's crude imports from Russia held steady as the top source in February 2026 despite a recent dip and US sanctions on firms like Rosneft (ROSN.ME) and Lukoil (LKOH.ME). While Saudi Arabia increased volumes significantly in recent months, the Hormuz risks could quickly redirect flows back to discounted Russian barrels. "The commercial rationale remains strong," one industry executive noted, requesting anonymity due to the sensitivity of ongoing talks.

Efforts to restructure India's energy imports have hit a snag with the Gulf crisis, forcing a pragmatic reassessment. Without reliable alternatives, the country would face severe supply shortages. Russia's offer—delivered through diplomatic channels, according to sources—highlights the enduring strength of bilateral ties that include recent defense deliveries like frigates in 2024–2025 and discussions on advanced systems.

Immediate Impacts and Contingencies

For Indian households, LPG users face the highest immediate risk, with 85–90% of supplies sourced from the Gulf. Rationing for those with alternatives is being considered, though officials stress it remains a last resort. Meanwhile, fuel exports—which account for about one-third of petrol and one-quarter of diesel production—may be shifted domestic to shore up inventories, potentially raising local prices.

Refiners are also boosting domestic LPG production where possible, but capacity constraints limit quick fixes. The situation remains fluid, with one government advisor describing the planning as "day-by-day" given the unpredictability of military developments. If the strait were to close fully, Trump administration estimates suggest India's buffers could deplete within four weeks without new inflows.

Longer-term, the crisis may accelerate diversification pushes already underway via India-Russia pacts in energy and payments. But for now, the focus is squarely on keeping the lights on and the stoves burning. As one analyst put it: "When the water rises, you grab whatever floatation device is closest. Right now, that's Russian crude."

Correction: An earlier version misstated the timeline for frigate deliveries; they occurred in 2024–2025, not 2023.