New Delhi: India is rapidly broadening its crude oil sourcing to Latin America as conflict linked to Iran and threats to the Strait of Hormuz force the world's third-largest oil consumer to reduce its dependence on Gulf supplies. Ship-tracking data from Kpler shows Venezuelan crude deliveries to India reached approximately 444,000 barrels per day (bpd) in August, vaulting the South American nation ahead of Iraq (118,000 bpd) and the United States (153,000 bpd) to become India's fourth-largest oil supplier.
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Imports from Venezuela, which resumed only in April, have climbed sharply since then, with Indian refiners simultaneously stepping up purchases from Brazil and Africa.
Despite the diversification push, Russia remains by far India's dominant crude source. Russian imports stood close to 2 million bpd in August, after touching around 2.6 million bpd in June and July — a level that accounted for more than half of India's total crude intake and provided a buffer against disrupted Middle Eastern routes.
Middle Eastern supplies fell to roughly 30 percent of India's import basket between April and July, down from 43 percent a year earlier. Over the same period, Latin American supplies, led by Venezuela and Brazil, climbed to 12.7 percent from just 3.5 percent.
Overall crude imports have held steady at around 5 million bpd in recent months, keeping refinery operations relatively intact despite the supply disruptions.
Sumit Ritolia, Senior Manager (Modelling) at Kpler, said India's response to the crisis goes beyond simply swapping one supplier for another. "India's strategy is increasingly operating on several fronts at once: increasing domestic upstream production where possible, diversifying overseas crude suppliers and transportation routes, building strategic and commercial inventories, and accelerating alternatives such as gas, biofuels, EVs and renewables," he said.
The trade-off, however, is cost. Gulf producers sit geographically closer to India, and longer voyages from Venezuela, the United States or West Africa push up freight and insurance bills, meaning geopolitical disruption inflates India's oil import costs even when physical supplies remain adequate.
"Diversification helps with supply security, but it can only go so far in insulating India from geopolitics. India will still need to import large volumes of crude, meaning any major disruption will ultimately feed through into higher oil prices, freight and import costs," Ritolia said.
Analysts note that crude oil is not necessarily where India's exposure to Middle Eastern disruption is greatest. The country relies even more heavily on the Gulf for liquefied petroleum gas (LPG), while liquefied natural gas (LNG) presents significant vulnerabilities because alternative supplies and logistical flexibility are more limited.
That means India's energy security agenda will increasingly require diversification beyond crude oil, encompassing gas supply contracts, storage infrastructure and expanded strategic inventories.
A parallel drive to lift domestic oil and gas production is underway, though analysts say it can only go so far. India is one of the fastest-growing sources of global oil demand, underpinned by rising vehicle ownership, aviation, industrial output and petrochemical consumption.
"While domestic production alone has limited potential to materially reduce import dependence, every incremental barrel produced domestically offers some insulation from geopolitical disruptions, international price volatility and higher freight costs," Ritolia said.
The geopolitical shocks have added urgency to India's push for natural gas, compressed natural gas (CNG), electric vehicles, biofuels and renewable energy, but these alternatives remain far from displacing oil at scale. Even an accelerated transition to electric vehicles will take years to work through the existing vehicle fleet.
The broader picture, Ritolia argued, is one of risk management rather than an exit from fossil fuels. "Overall, I would see the current push as a multi-pronged energy-security strategy rather than simply a move away from oil: produce more oil and gas domestically, diversify the crude that still needs to be imported, strengthen supply, invest heavily in creating strategic inventory buffers — SPR (Strategic Petroleum Reserve) for both crude and gas — and progressively increase the role of EVs, gas, biofuels and renewables," he said.
"Given India's economic and demand growth, oil is likely to remain an important part of the energy mix for a long time, even as its share gradually changes."
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The immediate challenge for policymakers is therefore not whether India can stop importing oil — it cannot, in any near-term scenario — but how effectively it can manage the financial and strategic risks of continuing to do so.