India Boosts Russian and UAE Oil Imports to Hedge Against Hormuz Risks

As global energy markets navigate volatility following the reopening of the Strait of Hormuz, Indian refiners are aggressively diversifying their crude oil sourcing. By ramping up purchases from Russia and maintaining high volumes from the UAE, India is building a strategic buffer against potential disruptions in the Middle East.

Russia Solidifies Position as India's Top Supplier

The shift in India's import basket is most visible in the surge of Russian crude. Data from maritime intelligence firm Kpler reveals that India imported an average of 2.66 million barrels per day (bpd) from Russia between June 1 and June 19, a significant jump from the 1.91 million bpd recorded in May.

This trend is expected to continue, with June imports potentially setting new records as refiners take advantage of competitive discounts and steady supply. Analysts suggest that Russian crude will remain a cornerstone of India's energy strategy even as Middle Eastern routes normalize, primarily due to favorable economics and enhanced supply security.

Hedging Against Strait of Hormuz Volatility

The strategic movement comes as the world watches the Strait of Hormuz, a critical waterway carrying approximately 20% of global oil consumption. Following recent geopolitical tensions and a brief closure by Iran, Indian refiners have moved to secure supplies to avoid shortages.

While the reopening of the Strait—facilitated by a US-Iran ceasefire—is a positive sign, the recovery is expected to be sequential. According to Sumit Ritolia of Kpler, LPG supplies are likely to normalize first, followed by LNG and crude oil. Recent signs of recovery are already evident, with three Indian-flagged oil tankers and an Indian LNG carrier having resumed transit through the waterway.

A Diversified Import Landscape

India’s energy security strategy currently relies on a broad mix of global suppliers to mitigate regional risks:

  • United Arab Emirates (UAE): Imports remained near record levels at 636,000 bpd in June, just shy of May's 644,000 bpd.
  • Saudi Arabia: Remains a key player with shipments of 384,000 bpd.
  • Venezuela: Has emerged as a vital fourth-largest supplier, with imports estimated between 300,000 and 400,000 bpd in June, providing essential heavy crude grades.
  • United States: Saw a sharp decline in shipments, falling from 252,000 bpd in May to 91,000 bpd in June.

The Road to Normalization

While the easing of tensions in the Gulf is expected to reduce freight costs and moderate global energy prices, a full return to pre-crisis trade patterns may take months. As shipping companies and insurers rebuild confidence in the Strait of Hormuz, India’s sourcing mix is expected to remain broader and more geographically distributed than in previous years to ensure long-term energy resilience.

Key Takeaways

  • Russian dominance: Russia has cemented its position as India's largest oil supplier, with June imports rising to an average of 2.66 million bpd.
  • Sequential recovery: Following the reopening of the Strait of Hormuz, LPG is expected to normalize first, followed by LNG and crude oil.
  • Strategic diversification: To mitigate Middle East risks, India is increasingly tapping into Venezuelan and Atlantic Basin supplies alongside steady UAE imports.