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India’s energy security is no longer just about securing barrels. It is about securing the price of those barrels when geopolitical shocks disrupt global markets. With Persian Gulf supplies accounting for almost 52% of India’s crude and condensate imports, the country remains exposed to disruptions along critical energy routes, according to the report “From Fundamentals to Financial Resilience: India’s Oil & Gas Market”, launched at the Global Commodity Conclave 2026.

The report, produced by the Multi Commodity Exchange of India (MCX) and Vanda Insights, says the global energy system is entering a prolonged period of geopolitical volatility, with sanctions, tariffs, export controls, shipping disruptions and attacks on critical energy infrastructure increasingly affecting supply chains and commodity prices.

The recent West Asia crisis demonstrated the importance of physical buffers. Indian refiners entered the crisis with around 190 million barrels of crude oil and petroleum products in storage, equivalent to roughly five weeks of national consumption. Supply diversification, refinery flexibility and coordinated procurement and shipping helped India respond to the disruption and secure replacement cargoes.

But the report says physical resilience alone is not enough. Securing physical supplies does not necessarily secure their price. Even when India replaces disrupted Gulf supplies with crude from Russia, the US, West Africa or elsewhere, those supplies remain exposed to movements in global benchmarks, freight costs and the rupee.

The shift in India's supply mix also illustrates this challenge. Russian crude imports reached a record 2.56 million barrels a day in June, more than half of India's total crude imports of around 5 million barrels a day, according to Vortexa data cited in the report. While Russian supplies helped cushion the impact of the West Asia crisis, growing dependence on a single alternative source can create new vulnerabilities.

This makes financial risk management an increasingly important part of energy security. Commodity exchanges can provide transparent price discovery, domestic benchmarks and hedging instruments that help businesses manage the financial impact of sharp commodity price movements.

“India cannot hedge away geopolitical risk. It can, however, become better at hedging its economic consequences.” The report says disciplined hedging should increasingly become part of corporate risk management and India's broader energy-security architecture.

The opportunity extends beyond oil producers and refiners. Airlines, transport companies, petrochemical manufacturers, power producers and other energy-intensive businesses are exposed to crude and natural gas prices through their operating costs. Rupee-denominated futures and options can provide these businesses with a domestic mechanism to manage commodity price risk.

The broader message is that energy resilience requires both physical and financial buffers. Diversified supply sources, strategic and commercial inventories, flexible infrastructure and refinery flexibility can help protect against physical disruptions, while liquid domestic derivatives markets can help businesses manage price volatility, protect margins and improve the predictability of energy costs.

India’s commodity markets can therefore play a larger role in strengthening energy security by enabling businesses to price in India, hedge in India and manage commodity price risk in India.

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