India imported an average of 2.66 million barrels per day of crude oil from Russia in June through June 19, up from 1.91 million barrels per day in May.
India increased its crude oil purchases from Russia and maintained near-record imports from the United Arab Emirates in June as refiners moved to secure supplies while waiting for a full recovery in Gulf exports after the reopening of the Strait of Hormuz, PTI reported, citing data from maritime and commodities intelligence firm Kpler.India imported an average of 2.66 million barrels per day of crude oil from Russia in June through June 19, up from 1.91 million barrels per day in May, strengthening Moscow’s position as the country’s largest oil supplier.
Imports from the UAE amounted to 636 thousand barrels per day during this period, which is slightly less than the record level of 644 thousand barrels per day that it imported in May. Venezuela emerged as the fourth largest supplier of crude oil to India, with shipments amounting to 209,000 barrels per day, behind Saudi Arabia, which amounts to 384,000 barrels per day.Imports from the United States fell sharply to 91,000 bpd from 252,000 bpd in May, according to Kpler data.These purchases underscore India’s diversification strategy, with discounted Russian oil prices continuing to attract refiners, while UAE supplies have helped offset uncertainty surrounding shipments through the Strait of Hormuz.
Recovery is underway, but risks remain
India, the world’s third-largest energy importer, relies heavily on the Gulf region for supplies of crude oil, liquefied natural gas and liquefied petroleum gas.
The turmoil began after Iran closed the Strait of Hormuz following US and Israeli attacks, strangling a strategic route that carries about 20% of global oil consumption and serves as a major export channel for producers such as Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and Qatar.Oil shipments through the Strait began to recover late last week after the United States and Iran agreed to a ceasefire. However, Iranian authorities accused Israel of violating the agreement, raising questions about the sustainability of the reopening.According to Sumeet Ritolia, senior director of modeling at Kpler, the reopening is expected to ease India’s energy imports, although the pace of recovery will vary across fuel types.“The reopening of the Strait of Hormuz will represent a major milestone for global energy markets, but the impact on India is likely to vary significantly across commodities,” he said.“While India remains one of the largest importers of hydrocarbons in the Middle East (crude, LPG and LNG), crude oil and LNG imports have proven relatively resilient throughout the disruption, unlike LPG, which has been hardest hit.”
LPG is likely to recover first
LPG supplies are likely to return to normal faster than crude oil and LNG imports because India has already adapted to months of disruption through alternative supply sources and routes, Retolia said.“As a result, the recovery is likely to be sequential, with LPG flows returning first to normal, followed by LNG and crude oil. Under our basic scenario of gradual reopening from early July, the initial focus will be on freeing detained cargo and restoring shipping flows before Gulf exporters can meaningfully increase their exports,” he added.India imports about 88% of its crude oil, nearly half of its natural gas and about 65% of its LPG consumption. Before the conflict, the Gulf region provided nearly half of the country’s crude oil imports, two-thirds of its liquefied natural gas requirements, and nearly 90% of its liquefied petroleum gas imports.Recent signs of normalization have already appeared. Three Indian-flagged oil tankers carrying more than 860,000 tons of crude oil and an Indian liquefied natural gas tanker have resumed transit through the strategic waterway after the US-Iran agreement.
Russian crude remains a central element in the strategy
Retolia said that Russian crude continues to support India’s oil import strategy, with June imports expected to exceed 2.35 million barrels per day and possibly set a record, supported by competitive discounts and steady demand from refineries.Russian supplies are expected to remain the cornerstone of the Indian import basket even after the Strait of Hormuz returns to normal due to favorable economics and security of supply considerations.Indian refiners have also increased their purchases from Venezuela and the Atlantic Basin since March to compensate for the shortfall in Gulf supplies.
Venezuelan imports are estimated at between 300,000 and 400,000 barrels per day in June, giving refiners processing heavier crudes an additional diversification option despite the risks associated with sanctions.According to Retolia, Gulf suppliers are likely to gradually regain market share as the Strait of Hormuz returns to normal, although India’s sourcing mix is expected to remain wider than before the crisis.He added that reopening the Strait of Hormuz would help ease shipping costs, reduce supply risks and moderate energy prices globally, although a full return to pre-crisis trade patterns could take weeks or months as shipping companies, insurers and traders rebuild confidence along the way.