Key facts
- India has stopped importing Iranian oil as a 30-day US waiver expired.
- The waiver, granted in early March, allowed India to import approximately four million barrels of Iranian crude.
- The US waiver aimed to alleviate energy price pressures caused by Iran's actions in the Strait of Hormuz.
- India's petroleum imports surged to $22.7 billion in May, nearly doubling from the previous year.
- India hopes softer oil prices and the reopening of the Strait of Hormuz will narrow its trade deficit.
- India has been diversifying its oil supply sources, including increased purchases from Russia.
India has ceased importing Iranian oil following the expiration of a 30-day US waiver, marking the end of its temporary resumption of purchases for the first time since 2019. The waiver, granted in early March amid heightened tensions and the closure of the Strait of Hormuz, had allowed India to import approximately four million barrels of crude, with an additional four to six million barrels in transit.
The US Treasury Department had issued the exemption to alleviate energy price pressures exacerbated by Iran's actions in the vital shipping lane. US Treasury Secretary Scott Bessent described the waiver as a 'stopgap measure' intended to counter Iran's attempts to 'take global energy hostage,' and noted India as an 'essential partner' expected to increase US oil purchases instead.
India's petroleum imports surged to $22.7 billion in May, nearly doubling from $14 billion in the same month of 2025, according to Dolat Capital. Analysts suggest that softer crude prices and the potential reopening of the Strait of Hormuz could significantly reduce India's import bill, easing pressure on its trade deficit, economic growth, inflation, and the rupee.
India, which imports over 85% of its oil, previously received about half of its supply from the Middle East. Amid the recent crisis, Indian refiners have been diversifying their sources, including by increasing purchases of Russian oil and exploring options from Venezuela and Brazil. Despite the waiver's expiry, Iran is estimated to hold a substantial floating reserve of crude oil.
In a concerning development, two Indian-flagged vessels reportedly came under fire from Iranian gunboats while attempting to transit the Strait of Hormuz, despite having prior clearance.