India's approach to energy security has transformed significantly. Moving from reliance on a handful of traditional suppliers, the country now embraces a more diversified and opportunistic oil sourcing strategy. Previously dependent on Saudi Arabia and West Asia for nearly two-thirds of its crude imports, India has expanded its oil basket to mitigate geopolitical risks while reaping cost benefits.
In recent times, Russia has emerged as a prominent supplier. This shift showcases New Delhi's pragmatic diplomacy, utilizing global disruptions to acquire discounted crude while maintaining relations across competing blocs. India's oil policy now emphasizes flexibility, diversification, and economic prudence over fixed geopolitical alignments.
Before 2005, India's energy security heavily relied on West Asia, which supplied over 70% of its crude oil. Key suppliers included Saudi Arabia, Iraq, Iran, Kuwait, and the UAE. Although India diversified its sources from 2005 to 2015 by adding African suppliers like Nigeria and Angola, West Asia remained dominant. In 2011-12, more than 60% of India's crude oil imports came from seven West Asian nations, with Saudi Arabia contributing around 17%.
Despite diversification efforts, African oil, primarily from Nigeria and Angola, accounted for only about one-fifth of total imports during this period.
India's long-standing oil ties with Iran faced major disruptions due to international sanctions. Following the United Nations Security Council sanctions imposed in June 2010, India's imports from Iran began to decline sharply. By 2012-13, Iran's share in India's crude oil basket had dropped to 7.1%, continuing this downward trend until a slight rise in 2015-16.
This period marked a turning point in India's energy diplomacy, showing how geopolitical sanctions can limit sourcing choices despite economic motivations.
The easing of sanctions on Iran in 2016 briefly revived energy ties, with India's imports from Iran increasing to 12.7%. However, the reinstatement of US sanctions in 2017 led to another decline, with Iran's share falling to just over 10% by 2019-20. India significantly reduced its Iranian crude purchases by 91.8%, turning to the UAE and the United States for oil, enhancing its diversification strategy.
As of now, India's oil import profile is much more balanced, with 40-45% sourced from the Middle East, 8-10% from Africa, and 10-12% from the Americas.
A significant shift occurred in 2022 when Russia became India's largest crude supplier, following the invasion of Ukraine. The resulting sanctions on Russia by the EU and the US led to discounted crude exports, which India and China capitalized on, prioritizing economic considerations over sanction compliance.
According to India's Directorate General of Commercial Intelligence and Statistics, Russia's contribution to India's crude basket surged from less than 2% in 2021-22 to 21.6% in 2022-23, further rising to 35.9% in 2023-24. Currently, approximately one-third of India's crude imports originate from Russia.
The increase in Russian oil imports can be attributed to attractive pricing. The cost of Russian Urals crude decreased from $79.41 per barrel in April 2022 to $66.49 in March 2025, enhancing refinery margins. Despite this growth, traditional suppliers like Iraq, Saudi Arabia, and the UAE have only seen marginal declines, indicating a strategy of diversification rather than outright replacement.
Analysts suggest that eliminating Russian oil imports would be challenging and costly for India. Rapidly sourcing from alternative suppliers would likely lead to increased costs due to higher freight charges and reduced discounts, potentially straining refinery economics, raising retail fuel prices, and triggering inflation.
Q1. How has India's oil import strategy evolved?
Answer: India has diversified its oil import sources, reducing dependence on traditional suppliers like Saudi Arabia and Iran while increasing purchases from Russia and other regions to mitigate geopolitical risks.
Q2. What is the current status of India's oil imports from Russia?
Answer: As of 2023, Russia accounts for approximately 35% of India's total crude imports, marking a significant increase due to the geopolitical landscape and favorable pricing for Russian crude.
Q3. How did sanctions affect India's crude oil imports from Iran?
Answer: Sanctions imposed on Iran led to a drastic reduction in India's crude imports from the country, dropping from double-digit levels to around 6% over recent years due to geopolitical pressures.
Q4. Why is it difficult for India to replace Russian oil?
Answer: Replacing Russian oil would require sourcing from multiple suppliers at higher costs, potentially impacting refinery margins and increasing fuel prices, which could lead to economic repercussions.
Q5. What percentage of India's oil imports comes from the Middle East?
Answer: Currently, about 40-45% of India's oil imports are sourced from the Middle East, reflecting a significant regional dependency despite diversification efforts.
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