Indian Refiners May Shift Back to Russian Oil Amid Escalating Gulf Tensions, LPG Supply Chain Vulnerability

India's Oil Imports: Potential Shift to Russian Supplies Amid Geopolitical Risks

Key Highlights

• India's oil refiners may pivot back to Russian oil supplies if access to Middle Eastern grades becomes constrained due to heightened geopolitical risks and potential blockade of the Strait of Hormuz.
• Disruption of the Strait of Hormuz will impact up to 50% of India's monthly total oil imports and almost all of its LPG purchases.
• 2.5-2.7 million barrels per day of India's crude imports transit the Strait of Hormuz, mainly from Iraq, Saudi Arabia, UAE, and Kuwait.

India's Dependence on Middle Eastern Oil

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• India's dependence on Middle Eastern barrels has increased over the past two to three months, rising to 50% of total imports from 40% in November-December 2025.
• The country imported 1.15 million bpd of Russian oil as of February 24, down from 1.09 million bpd in January.
• Imports from Iraq declined to 942,000 bpd against 1.02 million bpd last month, while Saudi Arabia exported 1.11 million bpd so far compared to 774,000 bpd in January.

Energy Security Considerations

• If flows are constrained, energy security considerations will push India back toward Russian barrels currently parked in the Arabian Sea.
• India's LPG flows are most exposed to Hormuz disruptions, with 80-85% of its LPG needs sourced from Gulf suppliers and transiting via the Strait of Hormuz.

LPG Flows and Structural Buffers

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• India's LPG sourcing flexibility is limited, making the potential impact more acute.
• Unlike crude, India does not maintain strategic LPG reserves of comparable scale, making LPG flows more logistically sensitive in a disruption scenario.
• The country imported 18.79 million metric tonnes of LPG during April-January of FY26 compared to 17.2 million tonnes imported during the same period of the previous fiscal.