Indian refiners likely to pivot back to Russian oil amid Gulf tensions, LPG flows face greater risks

Indian refiners likely to pivot back to Russian oil amid Gulf tensions, LPG flows face greater risks

• India may turn to Russian oil if Middle East supply is disrupted
• Strait of Hormuz disruption threatens 50% of India's oil imports
• India's LPG imports are highly vulnerable to Hormuz blockades

Did our AI summary help?

Indian refiners are expected to turn back to Russian oil supplies if access to the Middle Eastern grades becomes constrained amid heightened geopolitical risks and potential blockade of the Strait of Hormuz.

A disruption of the Strait of Hormuz will affect as much as 50% of India’s monthly total oil imports and almost all of its LPG purchases, analysts say.

Roughly 2.5-2.7 million barrels per day of India’s crude imports transit Hormuz, largely from Iraq, Saudi Arabia, UAE, and Kuwait, as per data and analytics firm Kpler.

Over the past two to three months, India’s dependence on Middle Eastern barrels has increased as refiners have pivoted away from a portion of Russian volumes after the US sanctioned major Russian oil producers Rosneft and Lukoil. While announcing the India-US trade deal, US President Donald Trump also said that India had agreed to stop buying Russian oil.

“As a result, the relative weight of Gulf-origin crude in India’s import basket has risen, increasing short-term sensitivity to any disruption in Hormuz transit,” said Sumit Ritolia, lead research analyst, refining and modelling at Kpler.

Kpler tracking indicates continued availability of Russian cargoes in the Indian Ocean and Arabian Sea region, including volumes in floating storage. “Should Middle Eastern inflows tighten, Indian refiners could pivot back toward Russian grades relatively quickly,” Ritolia said.

While India has a diversified crude import slate, Gulf crude retains a clear logistical advantage with a 5–7 days voyage compared to 25–45 days of voyage from the Atlantic, according to analysts at Kpler.

India’s dependence on Middle Eastern crude had already increased in the last two months to 50% of total imports from 40% in November-December 2025, followed by a pullback from Russian barrels amid tighter US and EU sanctions.

Kpler data showed India imported 1.15 million bpd of Russian oil as of February 24 against 1.09 million bpd in January. Imports from Iraq, however, declined to 942,000 bpd against 1.02 million bpd last month, while Saudi Arabia has exported 1.11 million bpd so far compared to 774,000 bpd in January.

Nikhil Dubey, senior research analyst, refining and modeling at Kpler, noted that if flows are constrained, energy security considerations would push India back toward Russian barrels currently parked in the Arabian Sea.

India’s LPG flows most exposed to Hormuz disruptions

The escalating tensions in the Middle East have not only put India’s crude oil supplies at risk but have also pressured the country’s LPG flows, with 80–85% of its LPG needs, with the majority sourced from Gulf suppliers, almost entirely transiting via the Strait of Hormuz.

Analysts also noted that while India’s crude flows can be buffered through strategic petroleum reserves, commercial stocks, and Russian optionality, LPG, however, has thinner structural buffers. Unlike crude, LPG sourcing flexibility is limited, making the potential impact more acute, they say.

“Escalating Middle East tensions once again highlight a structural reality that India remains materially exposed to the Strait of Hormuz, not just for crude oil, but even more so for LPG and LNG,” said Ritolia.

Ritolia noted that, unlike crude, India does not maintain strategic LPG reserves of comparable scale, making LPG flows more logistically sensitive in a disruption scenario.

As per data from the Petroleum Planning and Analysis Cell, the country imported 18.79 million metric tonnes of LPG during April-January of FY26 against 17.2 million tonnes imported during the same period of the previous fiscal. The country’s LPG consumption stood at 28 million tonnes during the period compared to 31.3 million tonnes in FY25.

"India imports almost all of its LPG through the Strait of Hormuz. Any disruption or restriction at this chokepoint would immediately pressure LPG flows,” said Nikhil Dubey, senior research analyst, refining and modeling at Kpler.

Israel’s Defense Minister Israel Katz said on X that Iran’s Supreme Leader Ayatollah Ali Khamenei was killed in the “opening blow” of a joint military operation against Iran. The US and Israel, in a joint operation, launched an attack on Iran on February 28 with plans to carry out several days of intensive attacks.