On March 16, 2026, in the Indian state of Gujarat, the Indian liquefied petroleum gas (LPG) carrier Shivalik arrives at Mundra port via the Strait of Hormuz amidst the conflict between the United States, Israel, and Iran.
Amit Dave | Reuters
India has started buying oil and gas from Tehran for the first time in seven years to cope with supply disruptions and soaring energy prices caused by the US and Israel’s war against Iran.
While the move to resume energy imports from Iran – the first purchases since 2019, according to energy information firm Rystad Energy – is unlikely to immediately draw the ire of the US government, analysts say it confirms New Delhi’s attempts to balance relations with Iran.
India’s oil and natural gas ministry said Saturday that Indian refiners have secured crude oil supplies from more than 40 countries, including Iran, amid the turmoil caused by conflict in the Middle East.
The ministry denied that refiners faced any hurdles in paying for Iranian crude, saying a ship carrying 44,000 tonnes of Iranian liquefied petroleum gas (LPG) had docked at a port in southern India.
“This is a confidence-building mechanism with Tehran,” Arpit Chaturvedi, Teneo’s South Asia adviser, told CNBC in an email, adding that the energy purchases serve as an “insurance policy” and signal that India does not intend to take sides in the conflict.
In return, India said it “looks forward to Iran’s cooperation” in allowing its ships to safely transit the Strait of Hormuz in the future.
India is the world’s third-largest oil importer and second-largest consumer of LPG, and is highly dependent on supplies passing through the Strait of Hormuz. About 50% of crude oil and most of LPG, the main cooking fuel for homes and commercial establishments, pass through strategic waterways.
“India is purchasing crude oil from Iran following a waiver from the US to purchase Iranian crude oil,” said Amitendu Palit, senior fellow and research director at the South Asia Institute. He added that future imports will depend on whether sanctions on Iranian oil are reinstated and how the geopolitical situation in the region develops.
careful balancing
Despite India’s long-standing ties with Tehran, there has been a growing public perception that New Delhi is leaning toward Washington since the outbreak of the Middle East conflict.
Meanwhile, 17 Indian-flagged vessels are waiting for safe passage through the strait, with seven having passed through the strait in recent weeks following diplomatic talks with Tehran. This move suggests that India is showing clear limits to its cooperation with the US.
“The premise that the United States is a reliable partner in moments of crisis has been repeatedly tested,” said Reema Bhattacharya, head of Asia research at Verisk Maplecroft, adding that India is likely to diversify its partnerships to last beyond the current conflict.
US President Donald Trump last week urged countries that rely on energy flows through the Strait of Hormuz to join a US-led naval coalition to protect shipping in the waterway, saying they needed to “seize and cherish shipping” while pledging US support.
“Instead of joining the naval coalition proposed by Washington, India has chosen to negotiate bilaterally with Iran for safe navigation. This is a deliberate act of distancing,” Bhattacharya said. This reflects India’s energy pragmatism and reluctance to publicly engage in conflicts it did not choose.
The balancing act comes after the Trump administration imposed 25% tariffs on Indian exports last year and accused New Delhi of financing Russia’s war in Ukraine by importing cheap oil from Moscow.
To secure a trade deal with Washington, India cut oil imports from Russia and increased its purchases of crude oil from the Middle East. However, the outbreak of war interrupted these supplies, and amid tight global markets and soaring fuel prices, India was forced to return to Russian crude oil.
India imported about 1.9 million barrels a day of Russian oil as of March 24, up from about 1 million barrels a day in February, according to Kpler data shared with CNBC. Despite this, India’s energy procurement costs are rising.
Rystad Energy senior vice president Pankaj Srivastava told CNBC in an email that the average price of a basket of Indian crude oil rose from $69 per barrel in February 2026 to $113 per barrel in March due to a “sharp increase in procurement costs.”
