India’s Crude Oil Tracker 2026: Supply Diversification and Energy Security Measures

Amid rising global crude prices, India has intensified its energy security protocols and import diversification efforts to ensure the long-term resilience of India’s oil supply chains.

India has intensified efforts to secure its energy supply chains and maintain stability in domestic fuel availability amid the 2026 Middle East conflict. Recent announcements by the central government outline measures to manage crude oil imports, natural gas supplies, and liquefied petroleum gas (LPG) distribution while ensuring continuity in maritime trade and essential services.

India remains one of the fastest-growing major economies and continues to prioritize energy security to protect key industries, sustain manufacturing activity, and support overall economic growth. The current geopolitical environment has prompted businesses and policymakers to adopt a cautious approach toward trade, manufacturing, and cross-border investments.

Central govt. measures to secure energy supplies (March 16, 2026)

Maintaining refinery operations

On March 16, 2026, the Ministry of Petroleum and Natural Gas has announced that all India refineries are operating at high capacity and are maintaining adequate crude oil inventories.

Ensuring continuity of crude shipments

Crude shipments to India continue despite global tensions. The Indian-flag tanker Jag Laadki is transporting about 80,800 MT of Murban crude oil from the United Arab Emirates to India.

Managing LPG imports

To stabilize LPG supply:

• LPG carrier Shivalik is scheduled to berth at Mundra Port with about 92,712 MT of LPG by March 16.
• LPG carrier Nanda Devi is also expected to arrive at the Kandla port by March 17.

These cargoes are being prioritized for discharge.

Increasing domestic LPG production

Domestic LPG output from refineries has been increased by about 36 percent to reduce reliance on imports.

India’s response to global volatility

Relevant ministries have outlined India’s preparedness in managing potential energy disruptions. According to the Union Ministry of Petroleum & Natural Gas, India ranks as the third-largest importer of crude oil, the fourth-largest refiner, and the fifth-largest exporter of petroleum products globally.

To track supply levels and market developments, a 24×7 control room has been set up to monitor India’s petroleum stocks and fuel availability across the country. On March 11, 2026, the central government announced that inventories of petrol, diesel, and aviation turbine fuel remain sufficient to manage short-term disruptions.

India’s oil supply and import diversification

While domestic market sentiments remain volatile and concerning, the central government maintains that India’s crude oil supply remains stable despite disruptions affecting the Strait of Hormuz, one of the world’s most important energy transit routes.

India consumes roughly 5.5 million barrels of crude oil per day. In the past, a large portion of imports has passed through this narrow waterway. However, India has significantly diversified its supply sources in recent years. As of March 2026, India now imports crude oil from around 40 countries. Approximately 70 percent of crude imports are routed through alternative maritime routes. In the previous year India routed about 55 percent of crude oil imports from alternative routes, with the remaining 45 percent coming through the Strait of Hormuz.

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While the efforts are on to maintain a sufficient oil reserve, the additional crude cargo shipments are already on their way to Indian ports. Domestic refineries are operating at high utilization levels, in some cases exceeding rated capacity.

This diversification strategy has helped reduce India’s exposure to disruptions along any single shipping corridor.

CLICK HERE: India Eases Port Procedures as Strait of Hormuz Disruptions Force Cargo to Turn Back

Natural gas supply management

India’s total natural gas consumption is estimated at about 189 million metric standard cubic meters per day (MMSCMD), with a large share produced domestically; however, disruptions in global gas supply have affected its imported volumes.

To stabilize distribution, the central government issued a Natural Gas Control Order on March 9, 2026, under the Essential Commodities Act.

Under the order:

• Domestic PNG supply and CNG for vehicles will continue receiving full allocations.
• Industrial users connected to the gas grid may receive moderated supplies.
• Certain sectors, such as fertilizers, refineries, and petrochemicals, may experience controlled reductions to protect priority users.

LPG supply adjustments and domestic production

LPG supply has also come under scrutiny due to its heavy reliance on Gulf imports. India imports roughly 60 percent of its LPG consumption, and about 90 percent of these shipments typically pass through the Strait of Hormuz.

To mitigate potential disruptions, Indian refineries and petrochemical facilities have been directed to increase LPG output by diverting related hydrocarbon streams into the LPG pool.

As a result:

• Domestic LPG production has increased by approximately 25 percent.
• Most locally produced LPG is being prioritized for household consumption.

For commercial users such as restaurants and hotels, a committee formed by major oil marketing companies is reviewing LPG allocations to ensure fair distribution during supply adjustments.

India’s maritime safety and trade continuity amid oil supply constraints

The maritime situation in the Persian Gulf is being closely monitored due to its importance for global energy shipping. As of March 11, 2026, 28 Indian-flagged vessels are operating in the region with 778 Indian seafarers onboard. Shipping authorities have established a 24-hour monitoring system to track vessel movements and coordinate assistance if required. Additionally, Indian ships and crews have been advised to adopt enhanced security procedures.

While port operations across India remain stable, authorities are working to ensure uninterrupted export-import (EXIM) trade flows.

Structural energy risks: Strait of Hormuz dependency

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The conflict has highlighted India’s continued dependence on the Strait of Hormuz, through which a substantial share of the country’s oil, liquefied natural gas (LNG), and LPG shipments typically transit.

India imports large volumes sourced from Gulf producers such as Saudi Arabia, Iraq, the United Arab Emirates (UAE), and Kuwait. While alternative supply routes exist, shipments from regions such as Russia, the United States (US), West Africa, or Latin America typically require longer shipping times and may increase freight costs.

Source: India Briefing; Department of Commerce (GoI)

Overview of the Strait of Hormuz

The Strait of Hormuz is a narrow but strategically critical maritime passage connecting the Persian Gulf to the Gulf of Oman, and further to the Arabian Sea and the Indian Ocean. It lies between Iran (north) and Oman and the UAE (south).

The waterway is about 33 km wide at its narrowest point and operates through designated shipping lanes for tankers and cargo vessels.

Globally, the strait is one of the most important energy shipping routes:

• Around 20 million barrels of crude oil per day transit the strait.
• This accounts for roughly 20 percent of global oil consumption.
• A substantial share of LNG shipments, particularly exports from Qatar, also pass through the route.

Key commodities India imports via the Strait

Crude oil

Approximately 40 percent of India’s crude oil imports pass through the strait. Major Gulf suppliers include:

1. Iraq
2. Saudi Arabia
3. UAE
4. Kuwait

Imported crude is refined domestically into petrol, diesel, aviation turbine fuel, and petrochemicals.

LNG

More than 50 percent of India’s LNG imports transit the strait, largely supplied by Qatar.

LNG supports:

• Electricity generation
• Fertilizer production
• City gas distribution networks

LPG

As per independent reports, India consumed about 29.6 million tonnes of LPG in FY2024.

• Around 60 percent of LPG demand is imported
• Nearly 90 percent of these imports pass through the Strait of Hormuz
• India has over 330 million LPG consumers, primarily households

Other industrial imports

Other commodities moving through Gulf shipping routes include fertilizers, petrochemicals and plastics, aluminum and metals and industrial chemicals

India imports around 40 percent of its fertilizers from the Middle East, many of which depend on natural gas feedstock.

Economic implications for India’s GDP

The ongoing conflict in West Asia could disrupt energy supply chains and slow LPG shipments to Indian ports, increasing pressure on fuel prices and the broader economy.

Economic estimates suggest that every US$10 increase in global oil prices could:

• Reduce India’s GDP growth by approximately 0.1–0.2 percentage points
• Increase inflation by around 0.2 percentage points

Higher oil prices raise India’s import bill, increase production and transportation costs, and can contribute to broader inflationary pressures across the economy.

Tracking the recent spike in oil prices

Global crude oil prices have risen sharply amid escalating geopolitical tensions in West Asia. Analysts indicate that the earliest economic effects of the crisis are likely to appear through higher oil prices, increased shipping costs, and rising international conflict-risk insurance premiums for vessels operating in the region. Even if physical supply flows remain stable in the short term, these factors can increase the cost of energy imports for India.

For much of FY 2025-26, the price of the Indian crude oil basket remained relatively stable, generally fluctuating within the US$62-70 per barrel range. However, prices began to climb toward the end of the fiscal year as geopolitical risks intensified. As of March 11, 2026, the price of the Indian crude basket reached US$113.57 per barrel, marking a sharp jump compared with the levels seen in the previous months.

Higher oil prices may increase the country’s energy import bill, inflationary pressures, and logistics costs, even if supply availability remains largely intact.

Uncertainty over India’s overseas port operations

The ongoing conflict also affects India’s regional connectivity initiatives. One example is the Chabahar Port, which India has been developing as a trade corridor linking it to Afghanistan and Central Asia while bypassing Pakistan.

The port has been used to transport humanitarian supplies and facilitate regional trade.

Outlook

India continues to adopt a cautious but proactive approach in managing the evolving geopolitical situation. Through diversified sourcing, increased domestic production, regulatory interventions, and international coordination, the government aims to ensure that fuel supplies remain stable.

(US$1 = INR 92.31)

(This article was originally published on March 12, 2026. It has since been updated till March 16, 2026.)