Indian Oil to Cut Middle Eastern Crude Purchases Amid Iran War Disruptions
Indian Oil Corporation (IOC), India’s largest refiner, plans to slightly reduce crude oil purchases from Middle Eastern producers under annual supply agreements for 2027/28, according to Reuters on October 21, 2026. The decision comes amid uncertainty over regional supplies due to the ongoing Iran war. IOC had planned to source around 47% of its crude imports from Middle Eastern producers under annual free-on-board contracts for the financial year ending March 2027.
Disruptions to oil shipments and attacks on vessels passing through the Strait of Hormuz have affected supply availability and pushed shipping costs close to record highs. In response, Asian refiners have increasingly turned to spot purchases, while some producers are offering delivered crude supplies and absorbing part of the higher freight costs. Indian refiners, including IOC, have also purchased discounted Iraqi crude to manage procurement expenses.
Indian refiners initially increased Russian oil purchases to compensate for reduced Middle Eastern supplies. However, Russian imports could ease in the coming months if shipments through the Strait of Hormuz improve and Gulf producers offer more competitive crude prices and freight rates. Meanwhile, IOC has paused a tender to acquire stakes in large gas carriers after vessel costs nearly doubled to around $150 million for a 10-year-old ship.
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