Russia Prepares To Increase Oil Supply To India & China Amid Rising Hormuz Tension

Russia has signalled that it is prepared to step up crude oil supplies to India and China as uncertainty grows around shipping through the Strait of Hormuz. Deputy Prime Minister Mr Alexander Novak said Moscow could raise exports to the two Asian buyers if required, according to Russia’s Interfax news agency.

The statement comes at a time when tensions in the Gulf have rattled global energy markets and raised concerns over the security of oil flows from the Middle East.

Russia Remains India’s Top Supplier

Despite increased competition, Russia retained its position as India’s largest crude oil supplier in February. Data from Kpler showed Indian imports of Russian crude oil at just above 1 million barrels per day (mbd) during the month. That was slightly lower than January’s 1.1 mbd.

Meanwhile, Saudi Arabia narrowed the gap by sharply increasing shipments to India. Saudi exports jumped nearly 30% month-on-month to cross 1 mbd in February, reflecting aggressive supply moves from Riyadh.

Russia’s readiness to boost volumes further could offer India and China an alternative if disruptions intensify in the Gulf region.

Strait Of Hormuz Under Spotlight

The latest developments follow claims by Iran’s Islamic Revolutionary Guard Corps (IRGC) that it has full control over the Strait of Hormuz. A Guards Navy official, Mohammad Akbarzadeh, told Fars news agency about the waterway being compromised and warned that vessels passing through could face risks, including missiles or drones.

The Strait of Hormuz is one of the world’s most critical oil transit routes. About 20-30% of global oil and gas shipments move through this narrow passage connecting the Persian Gulf to international waters.

Further escalating tensions, US President Donald Trump said the US Navy stands ready to escort oil tankers through the corridor. The remark signalled Washington’s intent to safeguard freedom of navigation as hostilities in the region continue.

India’s Dependency On Gulf Oil

India sources a significant portion of its crude through the Strait of Hormuz. Of the country’s total oil imports, around 2.5 to 2.7 mbd typically move through this narrow passage. Most of these barrels come from Iraq, Saudi Arabia, the United Arab Emirates and Kuwait, making the route vital for India’s energy security.

With military activity already slowing cargo movement in parts of the region, refiners in India have begun reviewing backup supply options. In such a scenario, additional Russian barrels could offer some breathing space. Much will depend on how the situation in the Gulf unfolds, but for now, buyers appear to be preparing for multiple contingencies rather than relying on a single route.

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Investor Takeaway

Oil markets are likely to stay sensitive to every headline coming out of the Gulf. Any disruption in shipments through the Strait of Hormuz can quickly push crude prices higher, which in turn affects fuel costs and corporate margins back home. If Russian supplies rise meaningfully, it could soften the immediate impact.

Sources:

The Economic Times

Hindustan Times