Hormuz, Crude Oil And Chabahar: 3 Big Ways US-Iran Truce Impacts India
Hormuz, Crude Oil And Chabahar: 3 Big Ways US-Iran Truce Impacts India Written By, Last Updated: June 18, 2026, 20:43 IST For India, the US-Iran
Hormuz, Crude Oil And Chabahar: 3 Big Ways US-Iran Truce Impacts India Written By, Last Updated: June 18, 2026, 20:43 IST For India, the US-Iran truce offers benefits on three fronts — energy security, maritime trade and regional connectivity. Rapid Read Before US sanctions forced Indian refiners to halt purchases in 2019, Iran was one of India's top oil suppliers, accounting for around 10 per cent of crude imports. (Photo: AI-generated) The US-Iran peace deal could prove to be a net positive for India, opening up the possibility of renewed Iranian oil imports, easing concerns over shipping through the Strait of Hormuz and reviving New Delhi’s strategic connectivity ambitions centred around the Chabahar port. Under the 14-point Memorandum of Understanding (MoU), Washington has agreed to issue waivers for the export of Iranian crude oil, petroleum products and derivatives, along with associated services including banking, insurance and transportation. For India, the US-Iran truce offers benefits on three fronts — energy security, maritime trade and regional connectivity — making it one of the biggest external beneficiaries of the agreement. Iranian Oil Could Return To India’s Energy Basket Before US sanctions forced Indian refiners to halt purchases in 2019, Iran was one of India’s top oil suppliers, accounting for around 10 per cent of crude imports.
India effectively stopped buying Iranian oil in May 2019 after the Trump administration ended sanctions waivers granted to eight countries, including India. Indian refiners subsequently turned to suppliers such as Saudi Arabia, Iraq, the UAE and the US. The new agreement could pave the way for a full resumption of Iranian oil exports. Since nearly 60 per cent of Iran’s revenues come from energy sales, Tehran has a strong incentive to quickly revive crude exports. For India, renewed access to Iranian crude would provide greater flexibility and help diversify its import basket, strengthening energy security. Iran’s Ambassador to India Mohammad Fathali said that before the imposition of sanctions, Iran was at times among India’s top three crude oil suppliers, and the volume of bilateral trade exceeded USD 17 billion annually. Strait Of Hormuz Reopening Could Stabilise LPG Supplies The de-escalation between Washington and Tehran and the reopening of the Strait of Hormuz are expected to ease concerns over India’s energy supplies. While India has diversified crude oil imports over the years, nearly 90 per cent of its LPG imports still pass through the strategic waterway.
The recent conflict had disrupted supplies, triggering higher LPG prices and long queues outside oil marketing company outlets in several parts of the country. According to the Petroleum Ministry, India now sources crude oil from around 40 countries, with non-Hormuz sources accounting for nearly 70 per cent of crude imports, up from 55 per cent earlier. The diversification helped cushion the impact of the disruption, but restoring normal shipping through Hormuz is expected to bring additional relief. Chabahar Port Could Get A Fresh Lease Of Life The US-Iran deal could also revive India’s strategic investments in Iran’s Chabahar port, which provides access to Afghanistan, Central Asia and Russia and forms a key link in the 7,200-km International North-South Transport Corridor. India’s involvement in the port came under pressure after the US administration revoked the sanctions waiver for Chabahar in October 2025 and granted a si month wind-down period that expired on April 26, 2026. Last week, External Affairs Ministry spokesperson Randhir Jaiswal said India remained engaged with the United States on the issue. According to reports, New Delhi has been exploring options to retain its presence at the port despite the expiry of the waiver.
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