Nearly 24 million barrels of Russian crude oil are currently floating in the Arabian Sea, emerging as a strategic cushion for India as escalating Iran-Israel hostilities — with the United States increasingly drawn into the conflict — disrupt tanker movement through the Strait of Hormuz and rattle global oil markets.
The volumes assume importance at a time when close to 40–50% of India’s crude imports transit through the Strait of Hormuz — the narrow waterway that carries nearly 20% of global oil supply. Since early March, heightened military tensions have slowed shipping activity, raised freight rates and pushed up war-risk insurance premiums, increasing supply uncertainty for key Gulf exporters including Saudi Arabia, Iraq, Kuwait and the UAE.
What do analysts at Kepler say?
“As per Kpler data, approximately 24 million barrels of Russian crude oil are currently floating across the Arabian Sea and can provide a critical supply buffer as disruptions in the Strait of Hormuz affect traditional Middle Eastern flows,” said Nikhil Dubey, Senior Refining Analyst at Kpler.
“With the Strait of Hormuz disrupted since 1 March and, as per Kpler AIS data, no India-bound crude tanker having transited the Strait since that date, Indian refiners are considering a swift recalibration of their crude basket. Russian barrels currently floating in the Arabian Sea and seeking buyers could be readily absorbed in the event of a supply crunch,” Dubey added.
India’s largest crude oil supplier in February: Russia
The development comes even as Russia retained its position as India’s largest crude oil supplier in February. Shipments stood at 1.07 million barrels per day (mbpd), accounting for 20% of India’s total crude imports, according to Kpler data. This was lower than January’s 1.19 mbpd and 23% share.
The moderation in Russian volumes was largely tactical. In recent months, Indian refiners reduced purchases of Russian crude to avoid potential punitive tariffs threatened by US President Donald Trump and to support New Delhi’s efforts to secure an interim trade arrangement with Washington. The adjustment reflected diplomatic and trade considerations rather than supply limitations.
Saudi Arabia benefited from the shift, raising exports to India from 0.77 mbpd in January to 1.01 mbpd in February, narrowing the gap with Russia to just 60,000 barrels per day. Iraq supplied 0.98 mbpd, the UAE 0.55 mbpd and Kuwait 0.15 mbpd. Beyond the Gulf and Russia, India sourced 0.32 mbpd from Brazil, 0.21 mbpd from Nigeria and 0.17 mbpd from the United States. Total crude imports rose to 5.22 mbpd in February from 5.14 mbpd in January.
However, with the Strait of Hormuz under strain, sourcing flexibility has become as critical as pricing.
Russian crude offers a logistical advantage. Unlike Gulf oil that must transit Hormuz, Russian shipments from Baltic and Black Sea ports reach the Arabian Sea via the Suez Canal and Red Sea, bypassing the chokepoint before heading to India’s west coast refineries at Jamnagar, Mundra and Vadinar.
“This remains a likely scenario, as a significant volume of Russian crude of the appropriate grade is already available on water. Indian refineries’ crude slate is largely dominated by medium sour grades, which Russian barrels can readily match,” said Pankaj Srivastava, Senior Vice President, Commodity Markets – Oil at Rystad Energy.
Officials privy of the development said that the Ministry of Petroleum and Natural Gas has held consultations with refiners and asked them to prepare contingency plans to safeguard supplies in case Gulf disruptions persist. India is also exploring alternative sourcing options including Russia, Venezuela, West Africa and Latin America, though Russian cargoes are seen as the most immediately accessible given proximity and grade compatibility.
Global markets are already reflecting geopolitical risk. Morgan Stanley has warned that Brent crude could rise to $120 per barrel if the West Asia conflict leads to prolonged disruption.
“Every $10 per barrel sustained rise in oil prices will hit Asia’s GDP growth directly by 20–30 basis points,” the brokerage said, estimating that India’s current account deficit — currently at 1.2% of GDP — would widen by 50 basis points for every $10 increase in crude prices.
Since India imports over 85% of its crude requirement, higher prices will directly impact fuel costs, subsidies and the trade balance. Russia’s share may have eased to 20% in February due to trade recalibration, but it remains India’s largest supplier. With 24 million barrels already in the Arabian Sea and Gulf routes facing uncertainty, refiners may once again adjust their crude mix to prioritise supply stability.
In a tightening global market, availability and route security are becoming as important as pricing in shaping India’s oil strategy.