Sunday saw major escalation in the war between Israel and Iran after the US bombed Iran’s nuclear sites in the wee hours. With Iran’s announcement of the war “just beginning”, markets experienced increased volatility, spurred by fears of crude oil prices soaring.
India’s purchase of oil also ramped up tremendously – its June imports of crude oil from Russia have been the highest in the last two years at 2-2.2 million barrels per day (bpd) as against 1.96 million bpd in May.
The country’s June imports from Russia will, in fact, be more than the total volumes that India buys from the Middle East – including Iraq, Kuwait, the UAE, and Saudi Arabia – says preliminary data by global trade analytics firm, Kpler. India’s imports from the Middle East were lower in June at around 2 million bpd, Kpler added.
India’s imports from the United States also rose, standing at 4,39,000 bpd in June, a big jump from 280,000 bpd purchased in May.
India, which has traditionally sourced its oil from the Middle-eastern countries, is the world’s highest oil-importing and consuming nation. It bought around 5.1 million barrels of crude oil in the last fiscal, which was then converted into like petrol and diesel in refineries.
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With Russia’s invasion of Ukraine in February, 2022, India started importing a large volume of oil from Russia because Russian oil was available at a significant discount to other international benchmarks due to Western sanctions and some European countries shunning purchases.
This clearly led to a dramatic increase in India’s imports of Russian oil, growing from less than 1 per cent of its total crude oil imports to a massive 40-44 per cent.
While the Middle East conflict has so far not impacted oil supplies, Tehran threatened on Sunday to close the Strait of Hormuz, through which a fifth of the world’s oil and a major LNG export transit.
India imports about 40 per cent of all its oil and about half of its gas through the narrow Strait that lies between Iran to the north and Oman and the United Arab Emirates to the south.
The Strait of Hormuz serves as the main route for oil exports from Saudi Arabia, Iran, Iraq, Kuwait, and the UAE. Many liquefied natural gas (LNG) shipments, especially from Qatar, also pass through the strait.
Kpler’s analysis may assign very low probability to a full blockade of the Strait, yet, concerns remain because Iran will not allow US and Israeli ships or jets via that space.
Iran’s state media has warned of oil spiking to USD 400 per barrel.
“While supplies remain unaffected so far, vessel activity suggests a decline in crude loadings from the Middle East in the coming days,” said Sumit Ritolia, lead research analyst at Refining and Modeling, Kpler.
Ritolia said with tankers (ballasters) being sent to the Middle East and Gulf (MEG) from the Gulf of Oman halving, current MEG supplies are likely to tighten in the near term. This might require India to rethink its sourcing strategy, he added.
According to Kpler, Gulf officials have received assurances from Iran that its oil and gas infrastructure won’t be targeted, though this reassurance offers limited comfort given the broader uncertainty and the fragility of the region’s diplomatic landscape.
One of the reasons for Iran to delay its closure of Strait is its potential impact on China’s imports, which is Iran’s largest oil consumer (importing 47 per cent of its sea-borne crude from the Middle East Gulf). Also, Iran’s reliance on Hormuz for oil exports via Kharg Island (handles 96 per cent of its exports) makes self-blockade difficult.
Tehran has also made deliberate efforts over the past two years to rebuild ties with key regional actors, including Saudi Arabia and the UAE, both of which rely heavily on the Strait for exports and have publicly condemned Israel's actions.
India, meanwhile, is keeping its options safe. Russian oil (Urals, ESPO, Sokol) is logistically detached from Hormuz, flowing via the Suez Canal, Cape of Good Hope, or Pacific Ocean.
Indian refiners have built refining and payment flexibility, while optimizing runs for a wider crude slate. Even the US, West African, and Latin American flows – though costlier – are increasingly viable backup options.
“If conflict deepens or there is any short-term disruption in Hormuz, Russian barrels will rise in share, offering both physical availability and pricing relief. India may pivot harder toward the US, Nigeria, Angola, and Brazil, albeit at higher freight costs,” said Ritolia.
India may also tap its strategic reserves (covering 9-10 days of imports) to bridge any shortfall. To curb inflation in case of domestic price hike, the government may consider price subsidies, especially for diesel and LPG.
The Strait of Hormuz remains a low-risk, but high-impact chokepoint – and India's refining sector is aligning itself to ensure continuity, flexibility, and resilience, said Ritolia.
“India imported an estimated 1.9 million bpd from the Middle-eastern countries – primarily Iraq, Saudi Arabia, the UAE, and Kuwait – during June 2025 (up to the 19th of June). Our projection for the full month stands at around 2.0 million bpd, slightly lower (100,000-150,000 bpd lower) than May,” according to Kpler.
June imports were largely pre-scheduled, based on cargo nominations made 15-45 days in advance. Therefore, while refiners have not yet responded directly to the latest developments, their current import portfolio already reflects a risk-aware strategy.
It also said Indian refiners may increase spot purchases of crude, particularly from Russia and Atlantic Basin producers such as West Africa, Latin America, and the US. “This could lead to a visible reduction in July nominations for Middle Eastern cargoes, as rising freight costs, insurance premiums, and security-related uncertainties further erode the economics of Gulf-origin barrels.”
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