India’s crude oil supply is facing increasing pressure as global disruptions intensify amid ongoing conflict in West Asia and complications surrounding Russian exports. Industry sources, shipping data, and government officials indicate that the country’s refiners have begun drawing down inventories to maintain refinery operations amid shrinking crude shipments.

Until recently, Indian refiners considered supply concerns around liquefied petroleum gas (LPG) and liquefied natural gas (LNG) more pressing than crude oil imports. However, growing geopolitical tensions and logistical challenges have heightened fears of an imminent crude oil shortage. Analysts warn that India, which depends on foreign sources for approximately 90 percent of its crude, is particularly vulnerable due to disruptions in Russian supplies, U.S. sanctions and waivers, and unstable shipping lanes in West Asia.

The ongoing conflict in West Asia, now entering its second month, has severely affected oil traffic through the Strait of Hormuz, a critical chokepoint for global energy flows. According to Sultan Al Jaber, the United Arab Emirates Minister of Industry and Advanced Technology and CEO of Abu Dhabi National Oil Company, the Strait’s closure has blocked nearly 600 million barrels of oil—equivalent to about four months of India’s crude demand. Shipping consultant AXSMarine reports a drastic decline in daily tanker movements from around 170 prior to the conflict to just six currently.

The International Energy Agency (IEA) has forecast a global crude supply decline of 1.5 million barrels per day (bpd) in 2026, alongside expected reductions in overall oil demand—marking the first such contraction since 2020. Analysts highlight that the market’s earlier expectations of surplus supply and subdued prices near $55 per barrel have reversed sharply amid a disruption of roughly 10 million bpd across key producing regions.

Industry executives emphasize the severity of the supply impact. Claudio Descalzi, CEO of Italy’s Eni, described the Gulf crisis as the most significant supply shock in four decades, citing combined shortfalls of 16.5 million bpd in crude and refined products. Meanwhile, ongoing attacks on oil tankers and cargo ships in the Strait of Hormuz by Iran and U.S. forces have prevented resumption of normal shipping activity. Market forecasts suggest a 61 percent chance that traffic may reopen by August, though key stakeholders express skepticism about the timeline.

On the Russian front, attacks by Ukraine targeting port facilities have temporarily reduced export capacity by up to 40 percent. Although loading operations have partly recovered, the threat to Russian energy infrastructure persists, creating uncertainty over supply stability. Recent policy shifts in the U.S., including waivers permitting additional Russian oil imports, have intensified competition for Russian barrels, previously limited to countries like China and India. Notably, Indonesia recently inked an agreement to purchase 150 million barrels of Russian crude, starting this month.

Russia remains India’s largest crude supplier, with its medium-sour Urals grade serving as a cost-effective substitute for disrupted West Asian crude. Without U.S. waivers granted in March, India’s crude supply deficit last month would have reached nearly 1.8 million bpd, roughly 30 percent of the country’s needs, according to data from industry analytics firm Kpler.

The complex interplay of geopolitical conflict, restricted shipping routes, and shifting global energy alliances continues to put India’s energy security under strain, raising concerns over the resilience of its refining sector and broader fuel supplies in the coming months.