Indian crude imports set several records in June. Total inflows reached about 5 million b/d, the highest level ever recorded for the month. Of that, 2.6 million b/d came from Russia, equivalent to 54% of India’s total crude imports and a historic record for Russian-Indian trade. Russian supplies, which had fallen to around 1.1 million b/d in February under sanctions pressure from Washington, more than doubled within four months and became a key pillar of India’s energy-security strategy.
India’s overall import volume suggests refiners have largely compensated for the collapse in Gulf supplies caused by the disruption in the Strait of Hormuz. This mattered greatly because the country’s SPR system remains extremely limited. Even when fully stocked, it can cover only around 9-10 days of normal domestic crude demand, versus the 90-day benchmark based on previous average net oil imports, as suggested by the IEA. India’s weaker import volumes in March-May were therefore caused by scarce availability rather than by a deliberate effort to avoid high prices (as China appeared to do).
Since the closure of the Strait, New Delhi has been searching for ways to replace Gulf-origin crude, which accounted for 52% of Indian imports in February. Iraq supplied roughly 1/5 of India’s crude in February, but then virtually disappeared from the import mix for three months. Only in late June did the first cargo from Iraq’s Basrah terminal (loaded in February and since than trapped in the Gulf) reach India’s west coast. Kuwait disappeared entirely after the closure, having supplied around 150,000 b/d in February, while Saudi Arabia fell from India’s second-largest supplier, at around 1 million b/d in February, to just 330,000 b/d in June. Although Saudi Arabia’s decline was not primarily a logistics problem. The kingdom could still export pipeline-delivered crude through the Red Sea port of Yanbu. The greater obstacle was pricing: under the current formula, Saudi term barrels became some of the most expensive crude available. The UAE was the only major Middle Eastern exporter to recover quickly from the March shock, shipping an average of 500,000-550,000 b/d to India over the past three months and becoming its second-largest supplier.
In this context, India’s return to Russian crude (and the rise in purchases to historic highs) was a matter of necessity rather than preference. Russia filled much of the gap created by the Gulf crisis, supplying a record 2.6 million b/d in June. Indian Oil Corporation was by far the largest buyer, taking more than 900,000 b/d. Reliance Industries’ Jamnagar complex was India’s second-largest buyer of Russian oil, purchasing more than 500,000 b/d. Nayara Energy’s Vadinar refinery, which underwent maintenance in April and much of May, returned to full operations and imported only Russian crude in June, at around 345,000 b/d. Nayara is almost 50% owned by Rosneft and is directly sanctioned by the EU and the UK, so this crude flow is predictable and unlikely to be substituted in any scenario.
