India's reliance on Russian crude has climbed to an all-time high as escalating tensions in the Gulf region tighten global oil supply, making it increasingly difficult for the South Asian nation to diversify its energy sources away from Moscow.

According to Sumit Ritolia, lead analyst at the trade consultancy Kpler, India's daily imports of Russian oil averaged over 2.6 million barrels in June and July. This marks a significant rebound from the February low of 1 million barrels per day and now accounts for more than half of the country's total crude imports.

Kpler data indicates India's overall crude imports have reached 5 million barrels per day, the highest level recorded since the US and Israeli strikes on Iran at the end of February.

Last year, former US President Donald Trump accused India of financing Russia's war machine in Ukraine, prompting New Delhi to temporarily scale back its purchases of Russian petroleum. However, the prolonged failure to reach a peace agreement between Washington and Tehran, coupled with a sharp decline in oil shipments transiting the Strait of Hormuz, has forced India to pivot back to Russia for its supply needs. To mitigate the fallout from the Gulf crisis, the Trump administration has granted waivers permitting certain nations to purchase Russian oil.

With over 90% of its crude oil and natural gas demand reliant on imports, the six-month-long Gulf conflict has laid bare the energy security vulnerabilities of the world's most populous nation.

In his Independence Day address this month, Indian Prime Minister Narendra Modi declared energy security a "top priority," stating that "we must make every effort to develop all types of alternative energy sources."

Data from Niti Aayog, the government's policy think tank, reveals that fossil fuels continue to dominate India's energy supply mix. Coal accounts for nearly 60%, oil for 28%, while nuclear power contributes a mere 1.6%.

India has launched a series of initiatives to diversify its energy sources, including opening the nuclear power sector to private players and mandating that domestic refineries boost production of cooking gas. However, experts caution that the energy transition will take considerable time.

"This system cannot be transformed overnight," said Hemant Mallya, who leads the industrial sustainability team at the Delhi-based Council on Energy, Environment and Water (CEEW).

In a report co-authored for the think tank in June, Mallya wrote that in coal, oil, and natural gas, "India faces multiple overlapping risks, including high import dependence, concentrated supply sources, limited reserve capacity, infrastructure bottlenecks, and direct exposure to global price volatility." The report added that these pressures "simultaneously impact household livelihoods, industrial production, government finances, and inflation levels."

Modi highlighted "improvements in energy efficiency" in his national address, noting that during his 12-year tenure, the number of cities with piped natural gas connections has grown from 70 to 700, covering 17.5 million households.

Yet, with over 330 million households in India still relying on liquefied petroleum gas (LPG) cylinders as their primary cooking fuel, the reach of piped gas remains minimal in comparison. Shortly after the Gulf conflict erupted, Indian refineries increased daily LPG output from around 36,000 tonnes to over 50,000 tonnes. Nevertheless, CEEW points out that even domestically produced LPG meets only about 40% of domestic demand, and "most of it is derived from imported crude oil."

As part of its long-term energy security planning, India is strengthening its reserve infrastructure. The government informed parliament this month that its strategic petroleum reserves can store 5.33 million tonnes of crude. When combined with commercial storage, total crude oil and petroleum product capacity is equivalent to 74 days of import cover. India is also exploring contingency plans, including storing a portion of its reserves in the United Arab Emirates.

Vibhuti Garg, director for South Asia at the Institute for Energy Economics and Financial Analysis, noted: "India has strategic petroleum reserves, but the storage days for LPG and LNG are severely inadequate. Market panic largely stems from the consumption side of LPG."

Disrupted Middle Eastern gas supplies due to the war have prompted India, like many Asian nations, to revert to coal for urban power generation. Over the decade since March 2015, India's annual coal production has surged by 70% to reach 1.04 billion tonnes.

Ritolia stated that the Iran conflict "highlights India's urgent challenge of not only completely moving away from oil dependence but also diversifying its crude supply sources and transportation routes."

He added that despite India's vigorous push for energy diversification, "given the growth of its economy and energy demand, even though the share of oil will gradually change, it will remain a significant component of the energy mix for a long time to come."