Iran is considering blocking the Strait of Hormuz after the U.S. airstrikes targeted its nuclear facilities within Iran. Iran’s national parliament has already approved the closure of the Strait. It is a move that could send global oil markets into chaos—but India seems to be reacting to the developments with calm. Turns out, years of deliberate planning under Modi’s government have paid off. They didn’t just talk about diversifying oil supplies; they actually did it, methodically spreading their sources far and wide.
Petroleum Minister Hardeep Puri put it plainly that India is sitting on weeks’ worth of reserves, and imports are still trickling in through other channels. It is a quiet reassurance in a noisy crisis. While the world watches Israel and Iran trade blows, India’s earlier groundwork—those unglamorous, behind-the-scenes deals and routes, is proving its worth. Not bad timing, honestly. You don’t just luck into energy security like this. It is what happens when you look at the map, see the risks, and decide not to put all your eggs in one basket. Especially when that basket’s a narrow strait everyone’s fighting over.
UAE-India local currency settlement & CEPA: Bypassing the Dollar and Hormuz
The landmark August 2023 rupee-dirham settlement mechanism enabled India’s first rupee payment for UAE crude – 1 million barrels purchased by Indian Oil Corp from ADNOC. This followed the May 2022 UAE-India Comprehensive Economic Partnership Agreement (CEPA), which slashed tariffs on 80% of goods and enhanced market access across 11 sectors. The agreement facilitates non-dollar transactions, reducing costs and dependency on Hormuz-transited shipments. Bilateral trade, standing at $84.5 billion in 2022/23, now flows through resilient financial channels, with a real-time payment linkage further shielding transactions from global volatility. This framework ensures continued access to UAE oil even if Hormuz closes.
Russian oil surge: The sanctions-driven safety net
India’s big bet on discounted Russian oil after the Ukraine invasion has really paid off. Fast forward to June 2025, and they’re bringing in more than ever – a whopping 2 to 2.2 million barrels every single day. That’s actually more than what they get from Iraq, Saudi Arabia, the UAE, and Kuwait combined. Think about that! Before 2022, Russian oil was barely a blip on the radar, under 1% of India’s imports. Now? It makes up over a third, sometimes nearly half, of their total crude intake, which averages around 5.1 million barrels daily.
But the real strategic win isn’t just the price or the volume. It’s how it gets there. Russian oil, like Urals and ESPO, completely sidesteps the Hormuz Strait. Instead, tankers take the long way round – through the Suez Canal, around Africa’s Cape of Good Hope, or across the Pacific. This physical separation from the usual Middle Eastern shipping lanes is a huge deal. As analysts point out, when things get messy in the Middle East, this Russian supply offers India something crucial: reliable barrels at manageable prices, acting like a vital buffer.
Angola: Beyond oil to strategic partnership
India’s top African oil supplier Angola exported $2.5 billion worth of crude to India in 2023-24 (approx. 110,000-130,000 bpd). Its exit from OPEC in 2023 over quota disputes unlocked new opportunities for flexible, non-cartel supplies. During President Lourenço’s historic May 2025 visit – the first by an Angolan head of state in 40 years ties expanded beyond energy. A $200 million defence line of credit for Indian equipment and training complements oil access, while Angola joined the International Solar Alliance. This diversification into security and renewables deepens energy ties and reduces vulnerability to single chokepoints like Hormuz.
Latin American imports: Emergency reserves at scale
In early 2025, Indian refiners increased their sourcing from Latin American nations. Imports risesd 60 % month on month to 453,600 bpd in february 2025, capturing 9% of India’s import basket – the highest since 2021. Key companies include Brazil’s Tupi, Mexico’s Maya, and even debut cargoes of Argentina’s Medanito oil. Though costlier due to freight, these volumes provide immediate alternatives during Middle East crisis. Combined with African supplies (330,000 bpd in Feb 2025), they form a rapid-response option detached from Hormuz risks.
Annual oil import statistics & diversification shift
Since 2022, India’s oil import landscape has undergone a revolutionary transformation, fundamentally reducing the dependence on Middle East. Once dominated at 65% of imports (nearly all transiting Hormuz), Middle Eastern suppliers’ share has dropped by 26 percentage points to just 39% (2 million bpd) by June 2025. The most dramatic shift came from Russia, previously a minor supplier at under 1% – which now delivers a staggering 2.2 million bpd (44% of total imports), marking a 40-fold increase. Latin American imports simultaneously hit record volumes at 453,600 bpd (9% share), a near-doubling from their 2022 baseline of 5%. U.S. shipments have also surged dramatically, jumping 57% monthly to reach 439,000 bpd. Complementing these diversified flows, India’s strategic petroleum reserves now hold 9-10 days of supply – a critical buffer against regional disruptions. This multi-continent sourcing strategy has slashed Hormuz-transited oil from over 60% to just 40% of total imports in three years.
Geopolitical resilience in action
Minister Puri emphasized that “a large volume of supplies do not come through Hormuz,” crediting Modi’s leadership for this strategic repositioning. Only 40% of india’s oil transits the strait today, down from over 60% in 2022. Kpler analysts confirm that even a short Hormuz closure (24-48 hours) would see India pivot harder to Russian, US, African, and Latin American crudes, supported by strategic reserves. While higher freight costs remain a challenge, India’s multi-vector oil policy – blending currency diplomacy, sanctions opportunism, and Global South partnerships –has transformed vulnerability into resilience, ensuring fuel stability for 1.4 billion citizens as West Asia erupts.
