Iran-Israel war: India overtakes Middle East oil buys with Russian, US crude in June

India has increased its oil imports from Russia and the United States in June, surpassing purchases from traditional Middle Eastern suppliers amid growing geopolitical tensions following Israel’s strikes on Iranian nuclear sites.

Indian refiners are projected to import between 2 and 2.2 million barrels per day (bpd) of Russian crude in June, the highest volume in two years, according to preliminary data from global commodity analytics firm Kpler. This exceeds the total oil volumes sourced from Iraq, Saudi Arabia, the UAE and Kuwait combined.

Russia supplied 1.96 million bpd to India in May. Imports from the US reached 439,000 bpd in June compared to 280,000 bpd the previous month, the data showed.

"India's June volumes from Russia and the US confirm this resilience-oriented mix," said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler. "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, the world’s third-largest oil importer, traditionally sources most of its crude from the Middle East. However, after Russia’s invasion of Ukraine in 2022 and subsequent Western sanctions, India ramped up Russian oil purchases, taking advantage of discounted rates.

Russian supplies grew from under 1% to as much as 44% of India’s overall crude imports.

June’s full-month projections show imports from the Middle East falling to around 2 million bpd, down from the previous month. Total Indian crude imports are expected to remain near 5.1 million bpd, which are refined into fuels like petrol and diesel.

The surge in non-Middle Eastern oil comes amid heightened market volatility after Israel’s June 13 attack on Iranian nuclear infrastructure. The US military followed up with strikes on Iranian targets on Sunday in a sharp escalation in regional hostilities.

While physical oil supplies remain unaffected so far, Ritolia noted early signs of disruption in tanker movements. "Shipowners are hesitant to send empty tankers (ballasters) into the Gulf, with the number of such vessels dropping from 69 to just 40, and (Middle East and Gulf) MEG-bound signals from the Gulf of Oman halving.”

The situation has renewed concerns over the Strait of Hormuz, a key chokepoint for global oil and LNG shipments. Roughly 40% of India’s oil and half its gas imports transit through the strait. Tehran has threatened to close the waterway in response to Israeli aggression, a move that could send oil prices soaring.

Kpler sees a full blockade as unlikely because of the direct impact to China, Iran's largest oil customer.

A closure would also risk unraveling Iran’s diplomatic efforts with Saudi Arabia and the UAE, and provoke military retaliation.

Any Iranian naval mobilisation would be detectable and likely invite a preemptive response from the US and allies, according to Kpler.

Ritolia said India's import strategy has evolved significantly over the past two years.

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 US, West African, and Latin American flows - though costlier - are increasingly viable backup options.

"India's June volumes from Russia and the US confirm this resilience-oriented mix," he said. "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.

Also, India may tap its strategic reserves (covering 9-10 days of imports) to bridge any shortfall.