India buys more Russian, Latin American crude as Middle East supplies dip

India has ramped up its crude oil imports from Russia and Latin American countries amid a sharp decline in shipments from the Middle East, driven by disruptions in the critical Strait of Hormuz. Crude imports from the region dropped by approximately 27% to 1.55 million barrels per day during the April-June quarter, marking the first quarter of the current financial year. This reduction followed the US-Israeli strike on Iran, which severely impacted maritime traffic through the strait, a vital artery for global oil supply. The shift in sourcing was evident as India boosted its purchases from the Commonwealth of Independent States, particularly Russia. Imports from this group rose by 8.3% to 2.26 million barrels per day. Russian crude deliveries reached an unprecedented level of 2.64 million barrels per day in June, representing a nearly 37.4% increase compared to May. During that month, Russian crude made up almost half of India’s total crude imports, totaling 5.24 million barrels per day. In addition to Russian crude, Indian refiners expanded their acquisition of heavier crude grades from Brazil, Venezuela, and Angola. This diversification strategy helped cushion against the declining Middle Eastern supply. The proportion of Russian crude in India’s overall import basket rose to nearly 41% during the quarter, up from around 38% in the same period last year. Meanwhile, the Middle East’s share plummeted to 31% from 41.4%. Industry insiders at Indian refining companies indicated that reliance on Russian, West African, and American crude could grow further if the current shipping challenges persist. The ongoing instability in the region, exacerbated by the breakdown of the fragile US-Tehran truce, has led to renewed hostilities and heightened risks for maritime routes. As a result, some refiners are considering alternative routes, such as the longer journey around the Cape of Good Hope, though this option would substantially raise transportation expenses. Despite the withdrawal of the temporary waiver allowing Russian oil imports, Indian refiners continue to depend on Russian crude sourced through non-sanctioned channels. This underscores the strategic importance of maintaining diversified energy supply chains in light of geopolitical uncertainties. With regional tensions escalating, India’s move to bolster imports from other regions reflects both economic pragmatism and a response to the evolving security landscape in the oil sector.