India's crude oil imports reached a potential historic high of 5.04 million barrels per day in May, marking an 11.2% month-on-month increase and surpassing the country's 2025 average import level of around 4.8 million barrels per day. According to Kpler data, this represents the highest monthly import volume for May ever recorded, with refiners aggressively ramping up Russian and Venezuelan shipments to bypass Middle Eastern disruptions. The increase comes despite elevated crude prices, with the Indian basket standing at $97.52 per barrel on May 28 and the month-to-date average at $106.83 per barrel. The closure of the Strait of Hormuz threatens nearly 50% of India's crude oil imports and nearly 90% of its liquefied petroleum gas (LPG) imports, making energy price volatility and supply disruptions a direct concern for everyday livelihoods and household affordability.
The United States has signaled its intention to end sanction waivers for countries purchasing Russian oil, with the decision potentially impacting India's energy supply chain. US Secretary of State Marco Rubio testified before the Senate Foreign Policy Committee that the ultimate decision regarding the Russian waiver would be made by the Department of Treasury. "We would like to end it as soon as we possibly can because the underlying policy of this country has been to sanction their oil. These are time-limited waivers for the purpose of opening up more global supply," Rubio told the Committee. The US granted a waiver from sanctions on the purchase of Russian oil in March and extended it twice, with the last extension granted on May 17 for one month. Democrat ranking member Jeanne Shaheen sought confirmation that the waiver would not be extended further when it expires on June 17, though Rubio declined to provide such assurance.
Russian crude oil imports rose to 1.93 million barrels per day in May, marking a 22.9% month-on-month increase from 1.57 million barrels per day in April, with Russia maintaining its position as India's largest crude supplier. Venezuelan crude imports increased 10.3% to 301,000 barrels per day from 273,000 barrels per day in April, while Angolan shipments almost doubled with a 92.4% increase to 256,000 barrels per day from 133,000 barrels per day. US crude imports more than doubled to 208,000 barrels per day from 101,000 barrels per day, with weaker crude demand from China freeing up additional barrels into the broader Asian market and the extension of waivers on Russian supplies expanding available supply. The war immediately created pressure on household and commercial energy access, with delays in LPG deliveries and price hikes forcing the Indian government to step in and strictly ration commercial LPG supplies while freezing cylinder prices for vulnerable households.
In contrast to the surge in non-Middle Eastern supplies, key Middle Eastern producers experienced sharp declines. Saudi Arabian supplies fell 41.2% to 395,000 barrels per day from 673,000 barrels per day in April and over 1.03 million barrels per day in February. Iraq's exports to India collapsed to just 36,000 barrels per day from 969,000 barrels per day in February and over 1 million barrels per day in January. The UAE remained India's second-largest supplier at 536,000 barrels per day, followed by Brazil at 288,000 barrels per day. Russian crude oil imports rose to 1.92 million barrels per day till May 28, marking an increase of nearly 80% compared to January levels before the West Asia conflict began. The closure of the Strait of Hormuz threatens nearly 50% of India's crude oil imports and nearly 90% of its liquefied petroleum gas (LPG) imports, with the critical energy corridor typically handling roughly 20 to 30% of the world's oil supply and 20% of its liquefied natural gas (LNG).
The energy crisis has intensified economic pressures, with India's central bank now warning of significant growth and inflation risks. The Reserve Bank of India (RBI) in its Annual Report for 2025-26 published on Friday stated that the oil shock from the Strait of Hormuz closure threatens near-term growth and pushes inflation above 4.6% for 2026-27. "Against the backdrop of a moderate global growth, the outlook for the Indian economy in 2026-27 remains positive, supported by strong macroeconomic fundamentals, although a prolonged West Asia conflict may pose downside risk," economists at India's central bank wrote. Assuming that the adverse impact of the Middle East conflict would remain contained in the near term, India's real GDP growth for 2026-27 ending March 2027, is projected at 6.9% with risks tilted to the downside. In the 2025-2026 fiscal year, India remained the world's fastest-growing major economy, expanding at 7.6%, with headline inflation at 2.1%. The crisis has forced oil marketing companies to raise fuel prices for the fourth time in less than a month, after holding off on price hikes for two months after the war began.
