India Uses Russian Oil and US Waiver to Insulate Economy from Middle East Shock

TL;DR: India counters Middle‑East supply disruptions by boosting Russian oil imports and leveraging a 30‑day US waiver, preserving fuel availability and price stability.

Context India imports nearly half of its crude oil, 60 % of its natural gas and over 90 % of its LPG from the Middle East. The Strait of Hormuz, through which about 20 % of global oil flows, is a critical conduit for more than 2 million barrels per day destined for India. Any blockage threatens sharp price spikes and jeopardises the livelihoods of over 10 million Indians working in Gulf states.

Key Facts By 2025 Russian crude makes up roughly 50 % of India’s oil imports, establishing India as the world’s largest buyer of Russian oil. In the first half of 2025, Russia supplied 1.75‑1.8 million barrels per day, rising to 2.25 million barrels per day after the West Asia crisis, while West‑Asian shipments fell 61 % to 1.18 million barrels per day. The United States granted a 30‑day waiver that lets India receive sanctioned Russian oil already on board ships, a move aimed at averting a fuel shortage triggered by the Middle‑East turmoil. India ordered about 30 million barrels of Russian oil under the waiver.

What It Means The shift toward Russian crude provides India with a strategic hedge against Gulf volatility. Discounted Russian oil, even after price cuts narrowed to $1‑$3 per barrel, remains cheaper than most Middle‑East grades. Indian refineries exploit the price gap by converting the crude into diesel and jet fuel for export, especially to Europe, which faces its own shortages of refined products. The US waiver underscores a pragmatic “co‑opetition” stance: Washington eases sanctions to keep global markets fluid, while India maintains its energy partnership with Moscow.

Looking ahead, the durability of Russian supply, the potential renewal of the US waiver, and any reopening of the Strait of Hormuz will shape India’s fuel security and its broader geopolitical balancing act.