The escalating war in West Asia has triggered a fresh shock across global energy markets, sending crude prices sharply higher, disrupting oil and gas shipments through the Strait of Hormuz and forcing major importers such as India to reinforce supply strategies.
Brent crude futures have surged 24% this week, the biggest jump since May 2020 when a record OPEC+ production cut agreement prompted a recovery from the pandemic lows. US West Texas Intermediate (WTI) has gained nearly 30%, the most since April 2020. On Friday, Brent extended its rally, rising $4.59, or 5.4%, to $90 per barrel at 1353 GMT (1923 IST). WTI rose $6.45, or 8%, to $87.46.
Oil fears rise as Gulf export risks deepen
The sharp spike was triggered by Qatari energy minister’s remarks that he expected all Gulf energy producers to shut down exports within weeks, a move that he said could drive oil to $150 a barrel, as well as Kuwait’s decision to start shutting down oil production at some oilfields due to lack of storage facility. New Delhi has firmed up plans to ensure uninterrupted supplies of both oil and natural gas (LNG) amid signs that the war may last longer, and cripple imports from some of the largest sources.
Officials here said the government is reassessing gas allocation after QatarEnergy and Petronet LNG invoked force majeure on LNG supplies following disruptions linked to the conflict. “Government may re-prioritise gas allocation to industrial sectors,” a top source said. “Today, we have more energy sourced from different parts of the world other than the Strait of Hormuz,” the source said. The officials also said the country continues to import crude oil from Russia and has not stopped purchases since 2022, when Western sanctions on Moscow reshaped global oil trade flows.
Russia remained India’s largest supplier of oil in February. Energy markets are now bracing for further volatility. Qatar’s energy minister told the Financial Times that if Gulf producers are forced to shut down exports for weeks due to the conflict, crude prices could surge to $150 a barrel.
Against this backdrop, the United States has issued a temporary 30-day waiver allowing Indian refiners to purchase Russian crude cargoes stranded at sea, in an attempt to stabilise global markets amid the supply shock. The waiver, issued on 6 March, allows shipments loaded before the latest US restrictions to be sold to India until 4 April. “To enable oil to keep flowing into the global market, the US is issuing a 30-day waiver to allow Indian refiners to purchase Russian oil,” US Treasury Secretary Scott Bessent said. Bessent said the stop-gap measure would not provide significant financial benefit to Russia because it only covers cargoes already loaded and stranded without buyers.
He also described India as a key partner for the US and said Washington expects New Delhi to increase purchases of American energy. “India is an essential partner of the United States,” Bessent said, adding that the measure would help “alleviate pressure caused by Iran’s attempt to take global energy hostage.”
Indian refiners are also seeking legal opinion on how they can purchase sanctioned Russian oil after Washington granted New Delhi a waiver to buy crude cargoes stranded at sea to ease pressure on global markets. The waiver allows refiners to offload shipments that had already been loaded before the latest restrictions took effect.
“So far refiners have bought only non-sanctioned oil,” a source said, adding that companies want to avoid complications such as payment issues or exposure to sanctioned entities and vessels while purchasing Russian cargoes.
Before the Russia-Ukraine conflict, Russia accounted for just 0.2% of India’s oil imports, with most supplies coming from Gulf producers including Saudi Arabia, Iraq, the UAE, Kuwait and Qatar. Since then, India has significantly diversified its energy sourcing.
According to government data, 55% of India’s crude oil imports in February originated from regions outside the Strait, highlighting the country’s effort to reduce supply risk from the region. Officials also pointed to alternative export routes such as the Habshan–Fujairah pipeline in the UAE and the Yanbu pipeline in Saudi Arabia, both of which bypass the Strait and help mitigate disruption risks.
India imports roughly 30% of its LNG through routes connected to the Strait of Hormuz, making the country vulnerable to prolonged disruptions in the region. Officials said the government is already seeking additional LNG cargoes to ensure supply stability.
“We are scouting for more LNG cargoes, re-prioritising gas allocations so that no Indian consumer is directly impacted,” the source said, adding that one state-run company has already secured an additional LNG cargo.
India eyes more LNG from Australia, PNG, US
India is also exploring additional LNG imports from Australia and Papua New Guinea, while remaining open to expanding energy purchases from the United States. “We were already buying $15 billion worth of energy products from the US. If the US has more energy to offer, we will buy,” the source said. Industry analysts say India’s dependence on imported LNG has steadily increased as domestic gas output stagnates and consumption rises across sectors such as city gas distribution, fertilisers and industry.
According to Sonal Ranjan, LNG and natural gas market analyst at Kpler, India’s LNG demand has increased by around 10 million tonnes over the past decade, reaching roughly 25 million tonnes in 2025. “With domestic gas production stagnating and total demand continuing to rise, the widening supply gap is increasingly being met through LNG imports,” Ranjan said. She added that India remains highly exposed to supply disruptions, with around half of its LNG imports coming from Qatar and the UAE.
“The suspension of LNG transit through the Strait of Hormuz since 28 February, affecting roughly 20% of global LNG supply, could significantly increase replacement cargo costs,” she said.
For now, however, the war in West Asia continues to reshape global energy flows—sending crude prices sharply higher while forcing major importers like India to juggle oil, gas and geopolitical risk at the same time.