India increased its crude oil purchases from Russia and Latin America during the April-June quarter, while imports from the Middle East declined as supplies through the Strait of Hormuz were constrained following the US-Israeli attack on Iran, according to data from industry sources quoted in a Reuters report.Before the conflict erupted, the Strait of Hormuz, located between Iran and Oman, served as the primary transit route for nearly one-fifth of global oil supplies.India stepped up imports from Moscow once Washington granted a temporary waiver, helping offset reduced supplies from Gulf producers caused by the disruption of traffic through the strategically important Strait of Hormuz.
India’s crude oil procurement trends
The data showed that crude imports from the Middle East fell about 27% to 1.55 million barrels per day during the April-June period, the first quarter of the current financial year. In contrast, imports from the Commonwealth of Independent States (CIS), including Russia, increased 8.3% to 2.26 million barrels per day, according to a Reuters report.India’s imports of Russian crude climbed to an all-time high of 2.64 million barrels per day last month, marking an increase of nearly 37.4% over May. Russian supplies accounted for about half of the country’s total crude imports of 5.24 million barrels per day during the month, the data showed.Indian refiners increased purchases of heavier crude grades from Brazil, Venezuela and Angola during the April-June quarter.Russia’s share in India’s overall crude import basket rose to nearly 41% during the quarter, up from around 38% in the corresponding period last year. Over the same period, the Middle East’s share declined sharply to 31% from 41.4%, according to the data. Sources at Indian refining companies told Reuters that dependence on crude from Russia, West Africa and the Americas is likely to increase further if shipping through the Strait of Hormuz remains disrupted and Iran-backed Houthi rebels in Yemen proceed with a naval blockade of Saudi Arabia.According to the data, India’s imports of crude from Saudi Arabia in June were the third highest among suppliers, with most of those supplies shipped through the Red Sea port of Yanbu.Regional tensions have intensified since the fragile truce between Washington and Tehran broke down in early July, leading to renewed exchanges of strikes and causing further disruption to shipping through the strategic waterway.The sources said one possible alternative would be to source Saudi crude through the longer route around the Cape of Good Hope, although that would significantly increase transportation costs.They added that Indian refiners continue to rely on Russian crude supplied by non-sanctioned entities, even after Washington withdrew the temporary waiver relating to sanctions on Russian oil.
