In an analysis titled India’s Oil Security Strategy: Structural Vulnerabilities and Strategic Choices, published by the Carnegie Endowment for International Peace (India), Vrinda Sahai examines how the 2026 West Asia crisis has exposed deep structural weaknesses in India’s energy security architecture. The escalation began on 28 February 2026 with US–Israel strikes on Iran and the subsequent Iranian retaliation, involving attacks across Gulf states. This, in turn, intensified volatility in global energy markets and disruption around the Strait of Hormuz, through which roughly a third of global crude oil flows, highlighting how quickly regional conflicts can translate into systemic global energy shocks.
For India, the crisis reveals a structural dependence on West Asian stability and maritime supply routes. With nearly 89 per cent of its crude oil imports sourced externally, and a significant share transiting through Hormuz, India remains highly exposed to supply interruptions. The situation comes at a time of US sanctions on Rosneft and Lukoil, two of the largest oil companies in Russia, alongside broader geopolitical pressures constraining India’s diversification options. This challenge is further compounded by the surge in global oil prices, from approximately $70 per barrel in February 2026 to nearly $120 in March, combined with higher freight and insurance costs.
In the analysis, Sahai argues that India’s prevailing approach, centred on opportunistic diversification and limited reliance on strategic reserves, is insufficient to manage systemic supply shocks. In the short term, India has partially relied on temporary procurement arrangements such as discounted Russian crude facilitated by limited waivers. However, such measures remain politically contingent and structurally unstable. Efforts to diversify supply beyond West Asian partner countries also face logistical constraints, including longer shipping times and higher transport costs from regions such as Latin America, West Africa and the United States.
A critical structural constraint is refinery configuration, with Indian refineries predominantly optimised for medium-to-heavy sour crude, which constitutes the majority of its imports. This creates challenges in shifting towards alternative crude sources without significant technological and infrastructural adaptation. The report further highlights the limitations of India’s strategic petroleum reserves, which provide only a short-term buffer of approximately eight weeks under disruption scenarios. Compared with other oil-import-dependent nations such as China, Japan and South Korea, India’s storage capacity moreover remains significantly lower and heavily centralised.
The analysis concludes that the 2026 Hormuz crisis underscores the inadequacy of reactive and crisis-driven energy management. A long-term strategy must include expanding reserves, diversifying long-term supply contracts, modernising existing refineries, and accelerating the transition to alternative energy pathways. Energy security, in this framing, is not merely a matter of supply management but a structural component of India’s broader economic resilience and strategic autonomy.