NEW DELHI — India is moving to deepen its energy ties with Russia just months after scaling back purchases of Russian oil, as rising global energy prices and geopolitical tensions reshape New Delhi’s strategic calculations.

In January, Indian negotiators reduced imports of discounted Russian crude in what was widely viewed as a concession to tariffs imposed by U.S. President Donald Trump. However, recent developments tied to the U.S.-backed conflict involving Iran have prompted a swift policy reversal.

Officials from India and Russia are now preparing for the potential resumption of direct liquefied natural gas (LNG) sales halted since the outbreak of the Russia-Ukraine war, according to sources familiar with the discussions. A preliminary “verbal agreement” to pursue negotiations was reached during a March 19 meeting between Russian Deputy Energy Minister Pavel Sorokin and Indian Petroleum Minister Hardeep Singh Puri in New Delhi.

If finalized, the deal could be concluded within weeks, though it carries the risk of breaching Western sanctions. India has reportedly approached United States officials seeking a possible waiver.

Beyond LNG, both sides are also discussing expanding crude oil trade. Russian supplies could rise to account for as much as 40 percent of India’s total imports within a month potentially doubling January levels, according to sources.

India had previously become a major buyer of discounted Russian oil following Moscow’s invasion of Ukraine, purchasing nearly $44 billion worth last year. The trade has been crucial in sustaining Russia’s wartime economy but has also been a source of friction with Washington.

The renewed engagement comes as energy markets reel from escalating tensions in the Middle East. A U.S.-Israeli strike on Iran in late February triggered retaliation from Tehran, including attacks on vessels in the Strait of Hormuz, a critical chokepoint through which roughly half of India’s oil and LNG imports pass.

The disruption has already led to long queues at fuel stations in parts of India and shortages of cooking gas in some areas, underscoring the country’s vulnerability to supply shocks.

In response, Indian authorities have instructed energy importers to prepare for renewed purchases of Russian LNG. Officials maintain that securing stable energy supplies remains a top priority. “India chose the course that best served its national interests, anchored in a long-standing and trusted partnership with Russia,” said former ambassador Ajai Malhotra.

Despite decades of growing strategic ties with the United States, largely aimed at counterbalancing China, India has faced economic strain following Washington’s recent policy decisions. Tariffs of up to 50 percent on Indian goods, imposed by the Trump administration, forced New Delhi to reassess its trade and energy strategies. The US Supreme Court has since ruled those tariffs unlawful.

A government briefing dated March 20 warned that prolonged disruptions in Middle Eastern oil flows could trigger “higher inflation, a weaker currency and rising foreign debt” in India. It also projected export growth losses of up to four percent and a rise in wholesale inflation.

Meanwhile, Russia is leveraging the situation to expand its footprint in India beyond energy. Executives from state-owned grid operator Rosseti have proposed collaboration on power transmission projects, particularly in remote regions. Russian officials are also exploring increased air connectivity, with representatives from Pulkovo Airport studying the feasibility of new direct routes.

Trade between the two nations has also grown more efficient, with 96 percent now conducted in local currencies, according to Russian Foreign Minister Sergei Lavrov. Transactions in rupees and roubles can now be processed in as little as a day, signaling deepening financial integration.

As geopolitical tensions continue to reshape global energy flows, India’s renewed pivot toward Russia highlights the enduring influence of long-standing alliances in times of crisis.