India Ramps Up Russian and UAE Oil Imports Amid Hormuz Uncertainty

As Indian refiners navigate the geopolitical volatility surrounding the Strait of Hormuz, they are aggressively diversifying their energy baskets to ensure supply security. By increasing imports from Russia and maintaining high volumes from the UAE, India is hedging against potential disruptions in the critical Middle Eastern maritime corridor.

Russia Solidifies Position as India's Top Crude Supplier

The most significant shift in India’s energy procurement is the surge in Russian crude imports. According to data from maritime intelligence firm Kpler, India imported an average of 2.66 million barrels per day (bpd) from Russia between June 1 and June 19. This marks a substantial increase from the 1.91 million bpd recorded in May.

With competitive discounts and steady demand from domestic refineries, Russian crude is expected to remain a cornerstone of India's import strategy. Analysts predict that June imports could potentially set new records, exceeding 2.35 million bpd, as refiners prioritize the favorable economics offered by Moscow.

Hedging Against Strait of Hormuz Disruptions

The strategic importance of the Strait of Hormuz cannot be overstated, as it carries approximately 20% of global oil consumption. Following recent geopolitical tensions and the temporary closure of the waterway, Indian refiners have moved to secure alternative and stable supplies.

While the UAE remains a vital partner, with imports holding near record levels at 636,000 bpd in June (just slightly below May's 644,000 bpd), the focus has shifted toward a broader sourcing mix. Other notable trends include:

  • Venezuela's Rise: Venezuela has emerged as a key player, with shipments reaching approximately 209,000 bpd, and potentially climbing to 300,000–400,000 bpd in June.
  • US Imports Slump: In contrast to the rise in Russian and South American oil, imports from the United States saw a sharp decline, falling to 91,000 bpd from 252,000 bpd in May.

Sequential Recovery of Energy Commodities

The reopening of the Strait of Hormuz following the US-Iran ceasefire offers a glimmer of hope for global energy markets, but the impact on India will not be instantaneous. Experts suggest a sequential recovery process across different fuel types.

LPG (Liquefied Petroleum Gas) is expected to be the first commodity to normalize. Because India has already adapted to months of disruption by seeking alternative routes, LPG flows are likely to stabilize before crude oil and LNG. Once the Strait fully normalizes, the initial focus will be on clearing trapped cargoes and restoring regular shipping flows. While Gulf suppliers are expected to gradually regain market share, India’s procurement strategy appears to be shifting toward a more permanent, diversified global footprint.

Key Takeaways

  • Russia's Dominance: Russian crude imports rose to 2.66 million bpd in June, cementing its role as India's primary energy supplier due to competitive pricing.
  • Diversification Strategy: Indian refiners are actively hedging risks by increasing imports from the UAE and Venezuela while reducing reliance on US crude.
  • Recovery Outlook: While the reopening of the Strait of Hormuz is a positive sign, LPG is expected to recover faster than crude oil and LNG imports.