Hormuz Oil Shock Drives India to Strengthen Ties with Russia: A New Normal or a Temporary Shift?
India’s crude oil imports from Russia have surged to unprecedented levels, surpassing previous highs recorded during the early stages of the Ukraine conflict. In June, Russian crude accounted for over 50% of India’s total crude procurement, with imports exceeding 2.5 million barrels per day. This increase is partly attributed to the recent waiver of sanctions on Russian oil by the Trump administration, although that waiver has now expired.
Despite the expiration of the sanctions waiver, Russia remains India’s most significant crude supplier, central to the country’s import strategy. However, the reopening of the Strait of Hormuz and the potential resumption of Middle Eastern oil supplies may alter this dynamic in the coming months.
India’s Top 5 Crude Oil Suppliers
Since the onset of the US-Iran conflict, Russia has solidified its position as India’s dominant crude oil supplier, with imports reaching over 240 million barrels in just four months. This figure is more than four times that of the UAE, the second-largest supplier, which provided over 58 million barrels during the same period. Saudi Arabia and Venezuela have also emerged as key players, ranking among the top five suppliers.
Experts indicate that India’s crude import strategy has become increasingly diversified and dynamic. Sumit Ritolia, a lead analyst at Kpler, noted that India has effectively maintained crude inflows through proactive diversification, even amid supply disruptions in the Middle East. Indian refiners have successfully secured alternative sources while managing refinery economics.
The Iran Factor
The recent Memorandum of Understanding (MoU) between the US and Iran could have long-term implications for India’s crude imports. The US has waived sanctions on Iranian crude oil for 60 days, set to expire on August 21, 2026. However, experts remain uncertain about the immediate impact on Indian refiners. Ritolia expressed skepticism about a significant increase in Iranian crude imports, citing that Indian refiners are already well-covered for the near term.
Any potential increase in Iranian crude would depend on the regulatory environment and the stability of the sanctions waiver. Sourav Mitra from Grant Thornton Bharat emphasized that Iran’s proximity to India could make it a meaningful supplier in the long run, but this is contingent on the stability of US-Iran relations and the establishment of a viable payment mechanism.
Russian Oil: Will High Import Levels Continue?
India has consistently maintained that it requires no US permission to purchase crude oil, with the sanctions waiver primarily easing banking and compliance issues. Before February 2022, Russian crude constituted only 2% of India’s supply. By 2023-25, it had risen to about one-third of imports, driven by significant discounts.
Mitra noted that while Russia’s share dipped briefly due to sanctions, the ongoing crisis in the Middle East has prompted Indian refiners to revert to Russian crude as a reliable source. The US has shown no inclination to impose secondary sanctions on India, which is the world’s third-largest oil importer.
According to Kpler, India’s supply position remains stable, bolstered by rising exports from various regions and increased OPEC+ production. However, the future of high import levels from Russia remains uncertain. Prashant Vashisht from ICRA indicated that Russia is likely to continue dominating India’s crude import mix in the near term, but this will depend on the restoration of normal supply levels in the Middle East.
Mitra concluded that while Russia will remain a major supplier, the situation is fluid. As the Strait of Hormuz reopens and discounts narrow, a gradual rebalancing towards Gulf suppliers is expected, although Russia will continue to play a significant role in India’s crude procurement strategy.
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