Russia-Ukraine War

Russia's invasion of Ukraine in February 2022 triggered the most severe global energy shock since the 1970s. Russia supplies nearly 40% of Europe's natural gas and is one of the world's three largest oil exporters. The sweeping sanctions imposed by Western nations after the invasion disrupted energy supply chains across Europe and rippled through global commodity markets.

For India, the war created a complex geopolitical moment. India refused to join Western sanctions and instead significantly increased its imports of discounted Russian crude oil — a pragmatic decision driven by India's long-standing oil import dependence and its need to contain fuel price inflation. This decision drew criticism from Western allies but partially cushioned the domestic impact.

Nonetheless, global oil prices surged to multi-year highs, pushing Indian petrol prices to a record ₹105 per litre by mid-2022 — crossing the ₹100 threshold that had seemed psychologically significant for years. Gold rose on safe-haven demand, though more modestly than in 2008 or 2020.

The rupee weakened sharply, crossing ₹80 per dollar for the first time — a psychological threshold that had seemed distant as recently as 2021. The crossing of ₹80 made headlines and signalled how far the currency had depreciated since the post-1991 reform era. The war demonstrated India's continuing vulnerability to energy price shocks despite decades of work to diversify supply and reduce oil intensity.