West Asia conflict: India's Russian oil purchase surges 50%, but how much can it offset supply shock?

India has sharply increased purchases of Russian crude oil in March as it scrambles to offset supply disruptions caused by a widening conflict in the Middle East.

According to ship-tracking data, India imported about 1.5 million barrels per day (bpd) of Russian oil in March, a roughly 50% jump from 1.04 million bpd in February, as refiners turned to Moscow to replace barrels typically shipped through the Strait of Hormuz.

India, the world’s third-largest oil importer, consumes about 5.8 million bpd of crude, of which roughly 88% is imported.

Normally, between 2.5 million and 2.7 million bpd of those imports come from Middle Eastern suppliers such as Saudi Arabia, Iraq and the United Arab Emirates.

But the ongoing conflict in West Asia has largely halted shipments through the Strait of Hormuz, forcing New Delhi to quickly diversify supply sources.

The surge in Russian crude is expected to cushion the impact, but it is unlikely to fully replace disrupted Middle Eastern flows.

“India was expected to import around 2.6 million barrels per day of crude via the Strait of Hormuz in March. At the same time, we are seeing a notable pickup in Russian barrels,” PTI quoted Sumit Ritolia, an analyst at energy analytics firm Kpler, as saying

“Based on vessel tracking and credible market sources, incremental Russian crude imports in March could reach 1-1.2 million bpd (over and above the February volumes), which means the effective shortfall from Hormuz exposure narrows to around 1.6 million bpd,” he added.

The US Treasury Department issued a 30-day waiver permitting delivery of Russian crude and petroleum products that had already been loaded onto tankers by early March and are currently stranded at sea.

Treasury Secretary Scott Bessent said the measure was designed to keep oil flowing into global markets and ease pressure triggered by disruptions.

“President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels ever recorded,” Bessent said in a post on the social media platform X. “To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil.”

US Energy Secretary Chris Wright said Washington had urged India to buy Russian oil already floating at sea and redirect it to Indian refineries to “tamp down” fears of supply shortages and price spikes.

“Instead of having it wait six weeks to unload there, let’s just pull that oil forward, have it land in Indian refineries and tamp this fear of shortage of oil, tamp the price spikes and the concerns we see in the marketplace,” Wright told CNN in an interview.

LPG crisis

The crude oil is only part of the problem.

The Strait of Hormuz also carries a significant portion of India’s liquefied petroleum gas (LPG) and liquefied natural gas (LNG) imports.

About 55% of India’s LPG imports and roughly 30% of LNG supplies typically transit through the strait.

India consumes around 1 million bpd of LPG, but domestic production covers only 40–45% of demand, leaving the country heavily reliant on imports. Of those imports, 80–90% normally pass through the Strait of Hormuz, making supplies particularly vulnerable to disruptions.

Reliance Industries on Tuesday said it is stepping up LPG production at its Jamnagar Refinery Complex and diverting natural gas from the KG-D6 Basin to priority sectors.

“Refineries can optimise LPG output by shifting feedstocks away from petrochemical production toward LPG recovery and by adjusting unit operations to maximise LPG yields,” Ritolia said. "That said, such optimisation can only provide marginal incremental supply and cannot materially reduce India’s reliance on LPG imports."