India's oil strategy: balancing risks between Hormuz and Moscow

The real divide inside the DA is not ideological but tactical

- MANISH VAID

AT INDIA Energy Week 2026 in January, the key event for the country’s oil and gas industry, officials signalled a confident assertion of India’s place in global energy: not only as the world’s third-largest energy consumer, but as a pragmatic actor in an increasingly unstable system.

Weeks later, the widening USIsrael-Iran conflict and renewed risk around the Strait of Hormuz began testing that claim in real time. For India, the shock is immediate: higher freight costs, costlier insurance, exposed sea lanes and pressure on the import bill. Yet the same crisis has also reinforced the logic of India’s evolving strategy: diversification across suppliers, strategic reserves, flexible diplomacy and a refusal to reduce energy security to bloc politics.

Brent crude, which had been trading around the low $70s before the crisis accelerated, moved through the $80s and $90s. The episode underlines that today’s oil risk is less about headline supply and more about the insecurity of routes and chokepoints.

Demand anchor in a riskprone oil order

India’s centrality to oil markets is no longer in question. In its Indian Oil Market Outlook to 2030, the International Energy Agency (IEA) projects that the South Asian nation will be the largest source of global oil demand growth this decade, adding roughly 1-1.2 million barrels per day of demand by 2030 and accounting for more than one-third of net global growth.

That trajectory is already visible in domestic consumption, where petrol, aviation turbine fuel and LPG remain key drivers of rising oil use. This demand profile gives India weight, but it also magnifies vulnerability. The country still depends on imported crude for the overwhelming majodty of its needs, and petroleum product consumption at around 20 million tonnes a month means even modest changes in crude prices, freight rates, or insurance premiums can ey spill over into inflation, fiscal calculations and household budgets.