India plugs oil gap as Mideast supplies sink

India has ramped up purchases of Russian oil and revived alternate supplies from Africa, Iran and Venezuela to blunt a sharp crude shortfall from the crisis-ridden Middle East, analysts said.

India, the world’s third-largest oil buyer, normally sources about half of its crude through the Strait of Hormuz, a vital waterway that has seen only a trickle of traffic since the United States and Israel launched attacks on Iran on Feb. 28.

India’s heavy import dependence, combined with modest oil reserves compared with major consumers like China, has prompted analysts to warn that India could be among the most vulnerable to a sudden oil price hike.While India is grappling with disruptions to cooking gas supplies, it has so far avoided the petrol shortages that have hit some neighboring nations.

Ship-tracking and import data show that India has partially plugged the gap by turning to old allies, expanding promising ties and reviving suppliers it had not tapped in years.

The biggest backstop has been Russian crude — a fuel source New Delhi spent much of the past year trying to pivot away from under stiff US tariffs.

Indian refiners imported an average of nearly 1.98 million barrels per day (bpd) from Russia in March, according to trade intelligence firm Kpler — a sharp jump from the previous two months.

Analysts said the surge was likely aided by a temporary US waiver granted in March covering Russian oil already at sea.

“Imports rose from approximately one million bpd in January and February,” said Nikhil Dubey, an analyst at Kpler.

“This near-doubling suggests that this additional volume was likely contracted following the sanction waiver,” he told Agence France-Presse (AFP).

Useful purchase

India likely purchased an additional 60 million barrels of Russian oil that will be delivered through April, two trade analysts said.

Washington’s exemptions have drawn criticism from Ukrainian President Volodymyr Zelenskyy, who says they complicate efforts to choke off Russia’s revenues more than four years into its full-scale invasion of Ukraine.

Kyiv gained little leverage after US President Donald Trump last week extended the waiver on Russian seaborne oil by another month.

“It’s now come in handy because shipments from Iraq and most of the Middle East have fallen heavily.”

Higher prices

Despite the diversification, the road ahead looks difficult.

India’s overall crude imports fell in March, sliding to 4.5 million bpd from 5.2 million in February, according to Kpler.

Analysts also cautioned that oil from the African nations has limits as a substitute.

“In a prolonged Iran conflict scenario, African crudes can partially backfill supply. However, they are unlikely to fully replace Middle Eastern barrels on a structural basis due to crude slate mismatches,” said Dubey, explaining Indian refineries were configured for different grades than what comes from the African countries.