India's sovereign energy needs: Russia and Iran

Inspired by Gessler's March 14, 2026 comments on India's oil and gas prices, Pete has done some research on how India's energy needs relate to Russia and, to a lesser extent, Iran.

Says Gessler: "In India the petrol/diesel prices haven't moved up, largely because the Indian Government and oil companies had maintained a somewhat elevated price for motor fuels for a long time, regardless of the price of oil dropping in the international markets after previous disruptions like the Ukraine war. So the oil companies have been sitting on a cash surplus for years and don't mind burning through a bit of it now in order to stabilize the market."

[Pete Background: India imports 82% of its oil needs. India’s strategic petroleum reserves may be 87 days. https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_India#Strategic_petroleum_reserves

India is the second biggest oil importer after China and is highly dependent on imported crude oil. https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_India#Foreign_trade India is the third largest consumer of crude oil in the world, after the US and China. https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_India#Consumption  https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_India

India has significantly increased its Russian oil imports since the start of the Russian invasion of Ukraine due to deep discounts, making Russia a top supplier.^[66][67] In 2025, several top US officials and political figures accused India of effectively financing Russia’s war in Ukraine by serving as a major buyer of Russian energy.^[68][69] In late 2025, the US, EU, and UK significantly escalated sanctions against Russia's two largest oil producers, Rosneft and Lukoil, to curtail the financing of the war in Ukraine.^[70] 

These measures have significantly disrupted India's oil trade, leading to a sharp decline in imports from these specific entities.^[71]On 19 December 2025, Ukraine’s Security Service (SBU) conducted a first-of-its-kind long-range drone strike on a "shadow fleet" oil tanker in the Mediterranean Sea, targeting a vessel that had recently delivered oil to India.^[72]

[But] On March 13, 2026, to help deal with the economic costs of the war, the US temporarily lifted restrictions on the sale of Russian oil. However, oil prices have barely been affected by this.

India’s top oil suppliers in 2024. by country, were https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_India#Oil_imports_by_source_country  US$51.3 Billion from Russia, $28.6 Billion from Iraq, $19.3 Billion from Saudi Arabia, $13.7 Billion from the UAE, and $5 Billion from the US.

https://en.wikipedia.org/wiki/India%E2%80%93Russia_relations#Cooperation_in_the_energy_sector ]

Says Gessler: "The bigger problem here is liquid natural gas (LNG) and its derivatives liquid petroleum gas (LPG) and compressed natural gas (CNG) etc. Local production of natural gas only meets about 40% of India's requirement and most of the remainder used to come from the Persian Gulf. Now there's a gas shortage especially for commercial establishments as the Indian Government wants to prioritize domestic (cooking/heating) [a sensitive public issue] supply until shipments from other places (US, Russia) can come in."

[Pete Background: https://en.wikipedia.org/wiki/India%E2%80%93Russia_relations#Cooperation_in_the_energy_sector  In 2025 the US threatened or imposed secondary sanctions on India for buying Russian oil and gas,

https://en.wikipedia.org/wiki/International_North%E2%80%93South_Transport_Corridor the International North-South Transportation Corridor (INSTC) is already being used to transport Russian fuel, including gas and oil, to Iran and beyond by rail. The 7,200 km multi-modal network serves as a strategic, sanctions-resilient route for energy and commodities, connecting Russia to Iran and India via the Caspian Sea and central Asian rail links.

·         Active Shipments: Russian fuel, including gasoline and oil, has already been transported to Iran by rail along the eastern branch of the INSTC, with roughly 30,000 tons moved in early 2023.

·         Infrastructure Growth: Russia and Iran are constructing the 162-km Rasht-Astara railway to physically connect their rail networks and boost the corridor’s capacity.

·         Strategic Goal: The INSTC aims to reduce trade costs and times by 30-40%, bypassing traditional Western-controlled maritime routes.

·         Projected Growth: By 2030, the INSTC capacity is expected to carry up to 25 million tons of cargo annually, including major shipments of oil, gas, and fertilizers.

Slightly off topic: Around 2014 Russia agreed to build more than 20 nuclear reactors over the next 20 years in India. https://www.bbc.com/news/world-asia-india-30978152  The Russian president stated in an interview, "It contains plans to build over 20 nuclear power units in India, as well as cooperation in building Russia-designed nuclear power stations in third countries, in the joint extraction of natural uranium, production of nuclear fuel and waste elimination." 

Gazprom, the Russian company, and Gas Authority of India have collaborated in joint development of a block in the Bay of Bengal. Kudankulam Nuclear Power Project with two units of 1,000 MW each is a good example of Indian–Russian nuclear energy cooperation. Both sides have expressed interest in expanding cooperation in the energy sector. In December 2008, Russia and India signed an agreement to build civilian nuclear reactors in India during a visit by the Russian president, Dmitri Medvedev, to New Delhi.^[110] ]