Ever since Iran called for closure of Strait of Hormuz—a critical choke point through which almost half of India’s crude oil passes—crude supply chains were disrupted, pushing prices up by about 40 per cent. The Iran crisis has once again revealed the structural fragility of India’s energy security architecture, and these external shocks continue to shape India’s economic security.

The vulnerability is rooted in a fundamental constraint. Given the lack of sufficient domestic crude oil reserves, India is dependent on imports to meet 85 to 90 per cent of its domestic demand. The West Asian region, unstable and prone to conflicts, accounts for almost half of India’s crude oil supply. Since instability in the West Asian region poses a direct threat to its energy security, India has been diversifying its import sources. However, outcomes suggest that the diversification has been more tactical than structural.

Although India has successfully increased its oil import sources from approximately 27 countries in 2006 to 40 in 2025, the share of the West Asian region remains above 50 per cent. The diversification, therefore, has not translated into meaningful de-risking. West Asia’s geographical proximity, lower freight costs, long-term supply agreements, vast crude reserves, and the availability of heavy-grade crude suited to Indian refineries have together made India overly dependent on the region. 

This over-dependence changed only during the Russia-Ukraine conflict, which started in early 2022. In response to the attack on Ukraine, European countries resolved to reduce the oil imports from Russia. The surplus oil was made available to India at discounted prices, and Indian refineries seized the opportunity to snap up Russian crude. Within a year, Russia became India’s largest oil supplier, with import of Russian oil going up from 2 per cent before the war to 35-40 per cent in 2024. Russia alone supplied more oil to India than all the West Asian countries put together.

Russia’s emergence as India’s topmost oil supplier was, however, purely circumstantial, not the result of any deliberate policy recalibration. Russia’s reliability as a long-term crude supplier is constrained by its geographical location, which raises freight costs, and by the high sulphur content of its crude, which makes it uneconomical for Indian refineries without steep discounts. Other geopolitical factors also limit Russia’s reliability as a supplier. India initially resisted US pressure to reduce imports from Russia. However, as pressure mounted a few months ago, India drastically reduced Russian oil imports despite the discounts that were available.

Africa as a reliable alternative

The African region has long been hailed as a viable alternative to West Asia. In 2016, Union Minister for Petroleum and Natural Gas Dharmendra Pradhan underscored this while speaking at the fourth India-Africa Hydrocarbons Conference. Most of the oil reserves of Africa are offshore, which makes them less prone to violence and easier to transport, unlike West Asian or Russian oil reserves.

Also, African oil has to pass through fewer strategic choke points compared with oil transported from West Asia or Russia.

Despite these advantages, there has been a gradual decline in imports from Africa: from about 17 per cent in 2010 to 8 to 10 per cent in 2025. The decline was partly due to reduction in oil production in Africa post 2014, low demand for crude oil during the COVID-19 pandemic, and the availability of discounted Russian oil over the past four years. 

Emergence of US as leading supplier

The US has also emerged as a leading oil supplier to India over the last decade. India imported about 13 per cent of its crude from the US in November 2025. Although India sees US oil as a long-term strategic alternative central to its diversification policy, the US’ emergence as a major oil supplier is primarily due to the evolving geopolitical landscape and not because of any proactive policy measure.

Initially, India had increased its oil imports from the US due to supply constraints created by US-led sanctions on Venezuelan and Iranian oil; both Venezuela and Iran were major oil suppliers to India. In 2025, India further ramped up oil imports from the US in response to tariffs imposed for buying discounted Russian oil. Moreover, going by the current ratio of reserves to production, US reserves can last for only the next 11 years. That seriously limits the US’ long-term reliability of as a major supplier.

Taken together, these patterns point to a consistent underlying dynamic: India’s crude oil sourcing is largely tactical and driven by refinery economics rather than long-term geopolitical strategy, with structural diversification policies taking a back seat, to the detriment of the country’s energy security.

Electrification of automobile sector

At the domestic level, efforts to mitigate this vulnerability have yielded uneven results. India has one of the largest automobile fleets in the world, which accounts for almost half of its consumption of petroleum products. In 2013, the government announced the National Electric Mobility Mission Plan (NEMMP) with the aim of achieving fuel security. Under NEMMP, the target was to enable sale of 6 to 7 million electric and hybrid vehicles by 2020 and save about 4,000 million litres of crude. To further boost the production and sale of electric and hybrid cars, the Union government in 2015 launched the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME India) programme under NEMMP 2020.

However, in the absence of an enabling ecosystem with charging facilities and with the higher cost of such vehicles, these schemes failed to produce the hoped-for turnaround; not even 1 per cent of the targeted EV sales could be achieved by 2020. Over the last couple of years, sales of only electric two- and three-wheelers have picked up. Sales of electric light and heavy commercial vehicles—which account for more than 60 per cent of petroleum product consumption in the automobile sector—are still to pick up.

In 2025, EVs accounted for approximately 8 per cent of total auto sales, which is well short of the 30 per cent target set by the government for 2030. According to the Council on Energy, Environment and Water (CEEW), EVs can bring down oil imports by 15 per cent. But the EV sector must grow four times over the next six years for this target to be achieved.

Strategic petroleum reserves

Another area of concern is the Strategic Petroleum Reserves (SPR). These are buffer stocks to meet energy demand during supply disruptions. Despite the growing demand for crude over the last three decades, India’s SPR has not grown. India has a total SPR capacity of 74 days—9.5 maintained by the government of India and the remaining 64.5 maintained by state-owned refineries. It is lower than the SPR maintained by other major oil-consuming nations like Japan, which holds 245 days of SPR.

The International Energy Agency (IEA), of which India is not a member, recommends a minimum 90 days of SPR. In 2021, the Indian government approved a plan to expand the storage capacity to 22 days from the current 9.5 days. However, according to the Parliamentary Standing Committee on Petroleum and Natural Gas, the expansion has been stalled primarily due to land acquisition issues, along with lack of coordination between the Centre and States.

The broader pattern is difficult to ignore. In ensuring diversification of supply, electrification of the automobile sector, and increasing Strategic Petroleum Reserves, India’s approach reflects intent but falls short in execution.

More importantly, short-term economic gains continue to outweigh long-term security imperatives. To enhance energy security and insulate the economy from geopolitical shocks like the Iran crisis, India has to prioritise long-term proactive structural adjustments over reactive adjustments.  

Umer John is a research scholar with a PhD focussing on India’s energy security and policy.

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