An Indian liquefied petroleum fuel (LPG) service, Shivalik, arrives at Mundra Port by way of the Strait of Hormuz, amid the U.S.-Israel battle with Iran, in Gujarat, India, March 16, 2026.
Amit Dave | Reuters
India has begun shopping for oil and fuel from Tehran after a seven‑yr hiatus because it grapples with provide disruptions and elevated vitality costs triggered by the U.S.-Israel conflict on Iran.
The transfer to renew Iranian vitality imports — the primary purchases since 2019, in line with vitality intelligence agency Rystad Power — is unlikely to attract fast ire from Washington, however analysts say it underscores New Delhi’s try and rebalance ties with Tehran.
On Saturday, India’s Ministry of Petroleum and Pure Gasoline mentioned Indian refiners had secured crude provides from greater than 40 international locations, together with Iran, amid disruptions attributable to the Center East battle.
The ministry denied that refiners confronted any fee hurdles for Iranian crude and mentioned a vessel carrying 44,000 metric tons of Iranian liquefied petroleum fuel (LPG) had berthed at a southern Indian port.
“It is a confidence‑constructing mechanism with Tehran,” Arpit Chaturvedi, South Asia advisor at Teneo, advised CNBC in an e mail, including that the vitality purchases act as an “insurance coverage coverage,” signaling that India doesn’t intend to take sides within the battle.
In return, India “expects cooperation from Iran” to make sure the protected passage of its ships via the Strait of Hormuz sooner or later, he mentioned.
India, the world’s third‑largest oil importer and second‑largest client of LPG, is closely depending on provides transiting the Strait of Hormuz. About 50% of its crude oil and most of its LPG — the first cooking gasoline for households and business institutions — passes via the strategic waterway.
“India is shopping for oil from Iran following a U.S. waiver permitting purchases of Iranian crude,” mentioned Amitendu Palit, senior analysis fellow and analysis lead on the Institute of South Asian Research. He added that future imports would rely on whether or not sanctions on Iranian oil are reinstated and the way the regional geopolitical scenario evolves.
Cautious balancing act
Regardless of India’s lengthy‑standing ties with Tehran, there’s a rising public notion that New Delhi has tilted in direction of Washington for the reason that begin of the Center East battle.
In the meantime, 17 Indian‑flagged vessels are awaiting protected passage via the strait, and 7 have crossed the route in latest weeks following diplomatic engagement with Tehran. The transfer suggests India is drawing clear limits in its alignment with the U.S.
“The belief that the U.S. is a reliable associate in moments of disaster has been examined repeatedly,” mentioned Reema Bhattacharya, head of Asia analysis at Verisk Maplecroft, including that India is more likely to diversify partnerships that outlast the present battle.
Final week, U.S. President Donald Trump urged international locations depending on vitality flows via the Strait of Hormuz to hitch a U.S.-led naval coalition to guard delivery within the waterway, saying they have to “seize it and cherish it” whereas pledging U.S. assist.
“India has chosen to barter bilaterally with Iran for protected passage as a substitute of becoming a member of Washington’s proposed naval coalition — a deliberate act of distance,” Bhattacharya mentioned. It displays India’s vitality pragmatism and reluctance to be publicly enlisted in a battle it didn’t select.
The balancing act comes after the Trump administration final yr imposed a further 25% tariff on Indian exports and accused New Delhi of funding Russia’s conflict in Ukraine by importing low cost crude from Moscow.
To safe a commerce take care of Washington, India reduce on Russian oil imports and elevated purchases from the Center East. Nevertheless, the outbreak of conflict disrupted these provides, forcing India to return to Russian crude amid tight international markets and rising gasoline costs.
Kpler information shared with CNBC exhibits that India’s imports of Russian oil rose to round 1.9 million barrels per day as of March 24, up from about 1 million bpd in February. Regardless of this, India’s vitality procurement prices have soared.
The typical worth of the Indian crude basket surged from $69 per barrel in February 2026 to $113 per barrel in March resulting from a “steep rise in procurement prices,” Pankaj Srivastava, senior vp at Rystad Power, advised CNBC in an e mail.