India Boosts Russian Oil Imports Amid Middle East Supply Crisis

India significantly increased its crude oil imports from Russia in early March, reaching an average of 1.5 million barrels per day (bpd) between March 1st and 12th. This surge, representing a 41% rise from January and a 45% increase from February, comes as a direct response to a major supply disruption in the Middle East.

The crisis, triggered by attacks between the U.S., Israel, and Iran, and subsequent retaliatory actions by Iran, led to the partial closure of the Strait of Hormuz. The International Energy Agency (IEA) estimates this event has impacted approximately 20 million bpd of crude oil and petroleum product flows, marking it as potentially the largest supply disruption in the history of the oil market.

Historically, India has relied heavily on Middle Eastern nations for its crude oil, sourcing about 52% of its daily 5 million bpd requirement from the region. To mitigate the impact of the Middle East tensions on its refineries, the United States granted India a 30-day waiver, allowing it to purchase crude oil from Russia. This waiver facilitated the substantial increase in Russian oil imports.

According to data from Vortexa, India's Russian crude imports were 1.06 million bpd in January and 1.03 million bpd in February. The U.S. further eased restrictions by permitting the purchase of Russian oil already at sea in tankers until April 11th, with an estimated 130 million barrels of Russian crude currently afloat.

Ivan Mathews, Head of Asia-Pacific Analysis at Vortexa, anticipates a continued rise in India's Russian crude imports. However, he cautioned that this increase would not fully offset the approximately 2.7 million bpd deficit from the Middle East. Mathews projects an overall decline in India's total crude oil imports for March, forcing refineries to draw from existing stockpiles.