Impact of Iran-Israel Conflict on India's Oil Imports

The ongoing conflict between Iran and Israel is causing a significant rise in global crude oil prices, which poses a serious challenge for India due to its heavy reliance on oil imports. With approximately 87% of its crude oil sourced from foreign countries, any disruption in production can lead to increased domestic prices. While India currently has sufficient oil reserves, the potential for shipping route disruptions raises concerns about future supply. This article delves into the implications of the conflict on India's oil supply and the critical shipping lanes involved.

By Narendra Chaudhary Jun 17, 2025, 12:46 IST

Rising Crude Prices and India's Dependency

Guwahati, June 17: While India is not directly involved in the ongoing conflict between Iran and Israel, the surge in global crude oil prices poses a significant threat to the Indian economy, which is heavily reliant on oil imports. Any disruption in oil production from key exporting nations leads to a rapid increase in international prices.

According to official reports, India's domestic oil production falls short of meeting its demand, resulting in a dependency on imported crude oil for approximately 87 percent of its needs.

This reliance means that any rise in global crude oil prices directly translates to higher prices domestically. Following the outbreak of hostilities between Iran and Israel, international oil prices have surged by nearly eight percent in recent days.

India primarily sources its crude oil from countries such as Iraq, Russia, Saudi Arabia, the United Arab Emirates, and the United States, with minimal imports from Iran. Nevertheless, the country will still feel the repercussions of the escalating international prices.

Moreover, if the conflict persists, it could disrupt shipping routes, posing a significant challenge for oil transportation to India.

Most maritime routes supplying oil to India traverse the Middle East, and prolonged conflict could jeopardize these shipping lanes. Currently, India maintains a sufficient crude oil stock, and shipping routes remain unaffected. However, the future remains uncertain if the conflict continues.

Sources indicate that the Strait of Hormuz is a crucial shipping lane utilized by OPEC members, including Saudi Arabia, Iraq, and Kuwait, for transporting oil to Asia, including India. Any disruption in this corridor could severely impact oil supplies to India.

Conversely, the Eastern Maritime Corridor, which links Vladivostok in Russia to Chennai, is expected to remain unaffected, providing a more efficient route for Russian crude oil shipments.