India Boosts Russian and UAE Oil Imports Amid Strait of Hormuz Uncertainty

As global energy markets navigate the volatility following the reopening of the Strait of Hormuz, Indian refiners are aggressively diversifying their energy baskets. By ramping up purchases from Russia and maintaining high volumes from the UAE, India is strategically hedging against supply disruptions in the Middle East.

Russia Solidifies Position as India's Top Supplier

Data from maritime intelligence firm Kpler reveals a significant surge in India's reliance on Russian crude. Between June and June 19, India imported an average of 2.66 million barrels per day (bpd) from Russia, a substantial jump from the 1.91 million bpd recorded in May.

This upward trend is driven by the competitive discounts offered by Moscow, which continue to make Russian barrels highly attractive to Indian refiners. Experts suggest that Russian crude will likely remain a cornerstone of India's import strategy even as Middle Eastern supplies stabilize, due to the favorable economics and enhanced supply security.

Strategic Hedging with UAE and Venezuela

While Russia dominates the volume, India is simultaneously managing its Middle Eastern dependencies. Imports from the UAE stood at 636,000 bpd in June, remaining just below the near-record high of 644,000 bpd seen in May. This ensures a steady flow of supplies while the industry waits for a full recovery of Gulf exports.

To further mitigate risk, Indian refiners have expanded their sourcing to the Atlantic Basin. Venezuela has emerged as a significant player, ranking as India's fourth-largest crude supplier with shipments of approximately 209,000 bpd, with some estimates suggesting June imports could reach between 300,000 and 400,000 bpd. Conversely, imports from the United States saw a sharp decline, falling to 91,000 bpd from 252,000 bpd in May.

The Road to Recovery in the Strait of Hormuz

The disruption in the Strait of Hormuz—a vital artery for 20% of global oil consumption—has forced India to recalibrate its energy security. Following a ceasefire agreement between the US and Iran, shipments have begun to resume, evidenced by three Indian-flagged oil tankers and an Indian LNG carrier recently transiting the waterway.

However, the recovery is expected to be sequential rather than immediate. According to Sumit Ritolia, Senior Manager-Modelling at Kpler, LPG supplies are likely to normalize first, followed by LNG and then crude oil. While the reopening is a major milestone, geopolitical tensions and the need to rebuild confidence among insurers and shippers mean a full return to pre-crisis trade patterns could take several months.

Evolving Energy Sourcing Patterns

India’s energy landscape is undergoing a structural shift. Historically, the Gulf region supplied nearly half of India's crude and 90% of its LPG. While Gulf suppliers are expected to regain market share as shipping routes stabilize, India's import basket is becoming significantly broader. The combination of discounted Russian oil, strategic UAE volumes, and diversified Atlantic Basin supplies provides a robust buffer against future regional instabilities.

Key Takeaways

  • Russian Dominance: India's Russian crude imports rose to 2.66 million bpd in June, cementing Moscow as the country's primary energy provider.
  • Diversification Strategy: Refiners are using Venezuela and the UAE to hedge against Middle Eastern volatility, while US imports have seen a sharp decline.
  • Sequential Recovery: Normalization of energy flows through the Strait of Hormuz is expected to happen in stages, with LPG recovering faster than crude and LNG.