How India’s Oil Strategy Is Helping Prevent A Global Price Shock Amid Strait Of Hormuz Crisis

Last Updated:March 12, 2026, 15:03 IST

India’s decision to continue buying Russian crude ensures that these supplies remain part of the global market.

The war in West Asia has triggered one of the most serious disruptions to global oil supply routes in years. Rising tensions between Iran, the United States and Israel have affected shipping through the Strait of Hormuz — a narrow maritime passage that carries a significant share of the world’s crude oil trade. Attacks on vessels and fears of mines in the waterway have already slowed tanker traffic, raising concerns about a sudden spike in oil prices worldwide.

Against this backdrop, India has unexpectedly emerged as a stabilising force in the global oil market. The role was acknowledged publicly by US Ambassador to India Sergio Gor, who praised New Delhi for continuing to purchase crude oil even as supply chains face disruption.

“India has been a great partner in maintaining stable oil prices around the world," Gor said, adding that Washington recognises that India’s continued purchases of Russian oil are helping ease pressure on global markets.

Why India’s Oil Purchases Matter

The global oil market is highly sensitive to supply disruptions. Russia remains one of the world’s largest crude exporters, and any sudden halt to its exports could remove millions of barrels per day from global supply. Such a shock would likely push benchmark prices sharply higher.

India’s decision to continue buying Russian crude ensures that these supplies remain part of the global market rather than being stranded due to sanctions or logistical bottlenecks. As Gor noted, India’s role is especially important because of its scale. “India is one of the largest consumers and refiners of oil and it is essential… to work hand in hand for market stability," he said.

India is currently the world’s third-largest oil importer and one of the biggest refining hubs. Large volumes of crude purchased by Indian refiners are processed into fuels such as diesel, petrol and aviation fuel, which are then exported to markets across Asia, Europe and Africa. This means India does not merely consume crude — it helps convert it into products that feed global supply chains.

By continuing to absorb crude supplies, particularly discounted Russian oil, India also reduces pressure on other producers in the Middle East or Africa. If India abruptly shifted its demand away from Russia and toward other suppliers, the sudden surge in demand could push global prices higher.

Strait of Hormuz Tensions Threaten Supply

The importance of India’s energy strategy has grown even more evident amid the current crisis in the Strait of Hormuz. The strategic waterway between Iran and Oman is a critical chokepoint for global oil shipments and handles a large share of India’s crude imports.

Recent attacks on commercial vessels and heightened military activity in the region have made shipping through the strait increasingly risky. According to reports, several vessels have been targeted since the conflict escalated, prompting fears of wider disruption to energy supplies.

Despite these risks, there have been signs that shipments are still getting through. A tanker carrying Saudi crude recently reached Mumbai after successfully navigating the Strait of Hormuz — one of the first confirmed arrivals at an Indian port since tensions escalated.

The arrival of the vessel underscores how closely global markets are watching the shipping route. Even limited disruptions to traffic through the strait can trigger volatility in oil prices.

Diplomatic Efforts To Keep Tankers Moving

India has also been actively engaging diplomatically to secure safe passage for its energy shipments. External Affairs Minister S Jaishankar recently spoke with his Iranian counterpart Abbas Araghchi amid the escalating crisis. Following these discussions, Iran allowed Indian-flagged tankers to pass through the Strait of Hormuz despite the tense security situation.

Reports indicate that at least two Indian tankers were cleared to transit the waterway after the talks, highlighting the role of diplomacy in protecting India’s energy lifelines during the crisis.

A Shift In Global Energy Politics

Washington’s public acknowledgement of India’s role reflects a pragmatic shift in global energy policy. While Western countries had previously pushed to curb purchases of Russian oil following the Ukraine war, the immediate priority has now become preventing a supply shock amid the West Asian conflict.

In fact, the United States recently allowed India to continue receiving Russian oil shipments already at sea as part of efforts to stabilise global energy supplies.

The logic is straightforward: keeping oil flowing into markets is essential to prevent extreme price volatility.

As tensions in the Strait of Hormuz continue to threaten one of the world’s most critical energy corridors, India’s ability to buy, refine and redistribute crude has taken on global significance. By ensuring that large volumes of oil remain in circulation despite geopolitical turmoil, India is quietly playing a key role in preventing the current crisis from turning into a full-blown global energy shock.

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