With the rising possibility of Iran blocking the Strait of Hormuz (SoH), India’s crude oil supply diversification with Russia as a strategic cornerstone backed by the US, Latin America and West Africa will help ensure supplies. However, ensuring supplies will come at higher logistics cost for India.

Analysts point out that, diversifying sources to 40 countries helps in hedging against supply shocks. Since January 2025, refiners have navigated geopolitical and tariff war disruptions led by this price-sensitive and flexible sourcing strategy.

Besides, India’s pivot towards the Americas — US, Brazil, Argentina, Guyana, etc — as well West Africa (Nigeria and Angola) will keep the cargoes moving even if the world’s most critical oil and gas transporting corridor is blocked.

Diversification

Global real-time data and analytics provider, Kpler emphasised that India’s import strategy has evolved significantly over the past two years. Kpler’s response was taken before the US attack on Iran’s nuclear facilities.

“India’s June 2025 crude oil imports tell a story of strategic positioning, not panic. Russian oil acts as a logistical and financial shield, while US and Atlantic Basin volumes reinforce optionality,” Sumit Ritolia, Kpler’s Lead Research Analyst for Refining & Modeling, told businessline.

Russian oil (Urals, ESPO, Sokol) is logistically detached from Hormuz, flowing via the Suez Canal, Cape of Good Hope, or Pacific Ocean, he explained.

Besides, Indian refiners have built refining and payment flexibility, while optimising runs for a wider crude slate. Even US, West African, and Latin American flows, though costlier, are increasingly viable backup options, Ritolia added.

Between June 1-19, India imported an estimated 2.1–2.2 million barrels per day (mb/d) of Russian crude, maintaining Russia’s share at over 35 per cent, aligning with a consistent pattern seen over the past 30 months, he said.

Imports from the US stood at around 439,000 b/d, signalling a steady expansion in India’s transatlantic trade links and a broader diversification of supply.

Currently, Ritolia noted that cargoes from West Asia are largely stable. There has been a modest decline in volumes from Iraq, but barrels from Saudi Arabia, the UAE, and Kuwait are tracking in line with the typical trends observed throughout 2025.

However, several early warning signs have emerged following the escalation in Iran-Israel conflict. For instance, there is heightened scrutiny of Gulf flows and a visible increase in wartime risk premiums, he said.

Besides, a decline in the number of ballast tankers entering the Gulf suggests that the pace of crude loadings may slow significantly in the second half of June.

It’s essential to note that June imports were largely pre-scheduled, based on cargo nominations made 15–45 days in advance.

“Therefore, while refiners have not yet responded directly to the latest developments, their current import portfolio already reflects a risk-aware strategy, with Russian barrels offering logistical security and insulation from any potential disruption at the SoH,” he explained.

Looking ahead, if the regional situation deteriorates further Indian refiners may increase spot purchases, particularly from Russia and Atlantic Basin producers such as West Africa, Latin America, and the US, he emphasised.

“This could lead to a visible reduction in July nominations for Middle Eastern cargoes, as rising freight costs, insurance premiums, and security-related uncertainties further erode the economics of Gulf-origin barrels,” he added.

On early warning signals, Ritolia said while supplies remain unaffected so far, vessel activity suggests a decline in crude loadings from West Asia in coming days.

Shipowners are hesitant to send empty tankers (ballasters) into the Gulf, with the number of such vessels dropping from 69 to just 40, and MEG-bound signals from the Gulf of Oman halving.

Looking ahead

Ritolia said that if the conflict deepens or there is any short-term disruption in Hormuz then Russian barrels will rise in share, offering both physical availability and pricing relief.

India may pivot harder toward the US, Nigeria, Angola, and Brazil, albeit at higher freight costs, he added.

Though the Middle East remains essential, especially for crude and LPG, refiners are better prepared than ever to respond quickly to supply shocks.

The Strait of Hormuz remains a low-risk but high-impact chokepoint, and India’s refining sector is aligning itself to ensure continuity, flexibility, and resilience, Ritolia noted.

Published on June 22, 2025