India-Russia Relations: Oil Crisis and Disrupted Geopolitics

Summary

Amid the Iran-US clash disrupting the Strait of Hormuz and global oil supplies, India has deepened energy ties with Russia. This pragmatic shift highlights New Delhi’s strategic autonomy, balancing energy security with Western partnerships in a fractured geopolitical landscape.

The recent military clash between Iran and the United States has triggered one of the most significant geopolitical and energy crises of the decade. Disorder in the Strait of Hormuz, surging fossil fuel costs, and highly erratic global supply chains have compelled nations to reassess their strategic alliances. In the midst of all this turmoil, the relationship between India and Russia has gained renewed significance.

What was once a relationship centred largely on defence and diplomacy has now evolved into a vital energy and economic lifelineone that helps New Delhi navigate a swiftly changing global landscape. As the world’s third-largest oil consumer, India relies on imports for nearly 90 percent of its crude oil. Most of that oil previously came directly from the Middle East. But escalating tensions between the U.S. and Iran, along with supply risks near the Strait of Hormuz, shifted the dynamics. The Gulf conflicts reduced export reliability and increased shipping and insurance costs. To safeguard itself, India had to shift its strategy, relying more on Russian crude as a dependable fallback option.

Recent data shows that Russian oil is vital to keeping India’s energy needs secure during this period when Hormuz is almost closed for fuel shipment. Though Russia is facing global sanctions and heavy political pressure from the global community it has stepped up as a trusted and time-tested steady supplier capable of moving massive amounts of crude. For India, security the crude oil is more about keeping prices pocket friendly for middle class consumers and domestic industries. Russian crude has acted as a shock absorber for the market and financial health of India during massive market swings.

This shifting of our national interest is a textbook example of India’s core foreign policy: strategic autonomy. Instead of locking itself into a dependent geopolitical camp, Delhi balances its ties with Russia, the United States, European countries, and Middle Eastern and South East Asian powers all at the same time. Still, the fractures between Washington and Tehran are pushing this balancing act to its absolute limit. India is caught in a tight spot. On one hand, it wants to expand a crucial strategic partnership with Washington in technology, defence, AI and Indo-Pacific security. On the other hand, it can’t just let go of a time-tested and trusted relationship with Russia when its own energy security is on the line.

This reflects a fractured world order where steady supply chains and predictable alliances just do not exist anymore and the geopolitics is moving towards a need-based relationship instead of ideological friendship. With the partial closure of Hormuz and the Middle East crisis squeezing global supplies, the Russian oil market in near future is going to be the most demanded commodity in the Asian Market. Ironically, long-term instability in the Gulf will surely force India to rely even more heavily on Moscow, which goes against New Delhi’s actual goal of diversifying its imports.

New Delhi has to walk a fine line as tying its economy so tightly to Russia brings major geopolitical risk and to keep from getting over-dependent on any single energy source. Western sanctions against Russia bring a non-stop wave of financial and diplomatic roadblocks, forcing India to constantly weigh its immediate economic survival against its alliances with the West. Meanwhile, Moscow is working hard to make its dominating presence across Asia, it is aggressively building economic ties with India and at the same time growing a compact and more defence-oriented partnership with China and Iran. This mix of conflicting motives makes grounds for a volatile diplomatic landscape. Plus, the fallout from the US-Iran standoff goes way beyond oil. Spikes in crude prices directly threaten inflation, economic growth, and fiscal stability across developing nations. The Reserve Bank of India has acknowledged these external shocks, though it maintained a 7.7 per cent GDP growth rate in the first quarter of the current calendar year which is a fine cushion. But the problem lies in the length of continuation of the conflict which will come with a massive price tag, likely forcing the government to roll out aggressive new strategies to keep the economy growing.

Finally, the Gulf crisis and the threat to oil security have proven once again how heavy the India-Russia axis still weighs. In fractured geopolitics, energy demands and economic realities have boosted the confidence in these two traditional allies. Their current alignment shows exactly how rising powers have to adapt when supply chains break and old loyalties shift. As global geopolitics keep shifting, Russia and India will almost certainly remain indispensable partners as they both chase their own national interests and strategic independence.

Disclaimer: Views expressed are of the author(s) and do not necessarily reflect the views of The Statecraft Institute.