India Resumes Iranian Oil and Gas Imports After 7-Year Pause, Signaling Strategic Shift

India has resumed oil and gas imports from Iran after a seven-year pause, marking a significant shift in its energy strategy amid ongoing global supply disruptions. The decision, announced by the Ministry of Petroleum and Natural Gas, comes as Indian refiners have secured crude supplies from over 40 countries, including Iran, to mitigate the impact of the U.S.-Israel war on Iran. A vessel carrying 44,000 metric tons of Iranian liquefied petroleum gas (LPG) recently arrived at a southern Indian port, signaling a return to Iranian energy procurement. Analysts suggest the move is a confidence-building measure with Tehran, aimed at ensuring safe passage for Indian ships through the Strait of Hormuz. India, the world's third-largest oil importer and second-largest consumer of LPG, relies heavily on energy supplies transiting the strategic waterway. About 50% of its crude oil and most of its LPG passes through the Strait of Hormuz, making secure access a critical priority. The resumption of Iranian imports follows a U.S. waiver allowing purchases of Iranian crude, though future shipments may depend on the reinstatement of sanctions and the evolution of regional tensions. India's energy procurement costs have risen sharply, with the average price of its crude basket increasing from $69 per barrel in February 2026 to $113 per barrel in March. This surge is attributed to a 'steep rise in procurement costs,' according to Pankaj. The move also reflects India's growing public perception of a tilt toward Washington, despite its long-standing ties with Tehran. With 17 Indian-flagged vessels awaiting safe passage through the Strait of Hormuz and seven having recently crossed following diplomatic engagement with Iran, New Delhi is signaling its intent to diversify partnerships beyond the U.S. This strategic shift comes after the Trump administration imposed an additional 25% tariff on Indian exports and accused the country of funding Russia's war in Ukraine by importing cheap crude from Moscow. In response, India initially cut back on Russian oil imports and shifted to Middle Eastern suppliers, but the outbreak of war disrupted those sources, prompting a return to Russian crude. Kpler data indicates that India's Russian oil imports rose to around 1.9 million barrels per day as of March 24, up from about 1 million bpd in February. The balancing act between energy security and geopolitical alignment underscores India's pragmatic approach to navigating global tensions.