Many inference tasks on knowledge graphs, including relation prediction, operate on knowledge graph embeddings -- vector representations of the vertices (entities) and edges (relations) that preserve task-relevant structure encoded within the underlying combinatorial object. Such knowledge graph embeddings can be modeled as an approximate global section of a cellular sheaf, an algebraic structure over the graph. Using the diffusion dynamics encoded by the corresponding sheaf Laplacian, we optimally propagate known embeddings of a subgraph to inductively represent new entities introduced into the knowledge graph at inference time. We implement this algorithm via an efficient iterative scheme and show that on a number of large-scale knowledge graph embedding benchmarks, our method is competitive with -- and in some scenarios outperforms -- more complex models derived explicitly for inductive knowledge graph reasoning tasks.