As Iran Hormuz Strait Threat Looms, India Shifts Crude Sourcing; Boosts Russian & US Oil Imports in June

Tensions in the Middle East have escalated sharply after the United States launched airstrikes on Iran's nuclear facilities, prompting Tehran to threaten a full closure of the Strait of Hormuz - the world's most critical oil corridor. Just hours after President Donald Trump confirmed U.S. warplanes had bombed three key sites - Fordow, Natanz, and Esfahan - IRGC Navy Commander Brigadier General Alireza Tangsiri reportedly warned, "The Strait of Hormuz will be closed within a few hours."

Amid these rising fears of disruption to global energy flows, India has swiftly adjusted its oil sourcing strategy. Facing potential supply risks from the Gulf, Indian refiners significantly boosted crude imports from Russia and the United States in June, outpacing combined imports from traditional Middle Eastern suppliers. According to global trade analytics firm Kpler, this shift marks a strategic effort by India to reduce dependency on oil transiting through the volatile Hormuz route.

Surge in Russian and US Crude Imports

Kpler data reveals that Indian refiners are expected to import 2-2.2 million barrels per day (bpd) of Russian crude in June-the highest in two years. This volume exceeds India's combined oil imports from Iraq, Saudi Arabia, the UAE, and Kuwait, which stand at around 2 million bpd for the month.

India's oil imports from the US have also risen sharply, jumping from 280,000 bpd in May to 439,000 bpd in June. Between June 1 and 19, Russian shipments accounted for over 35% of India's crude intake.

"India's June volumes from Russia and the US confirm this resilience-oriented mix," said Sumit Ritolia, Lead Research Analyst at Kpler.

Strait of Hormuz Under Threat

The Strait of Hormuz, through which 40% of India's crude and nearly 50% of its gas is transported, has become a flashpoint amid Iranian threats to shut it down following military actions by Israel and the United States.

Despite these threats, analysts believe a full blockade is unlikely. Iran depends heavily on the strait, especially via Kharg Island, which handles 96% of its oil exports. Shutting it would directly impact Iran's key customer, China, which sources 47% of its seaborne crude from the Gulf.

Ship Movement Drops

Kpler noted a decline in vessel activity as tensions rise:

Ballaster tankers entering the Gulf dropped from 69 to 40

Gulf of Oman-bound signals halved

"Shipowners are hesitant to send empty tankers into the Gulf due to security risks," said Ritolia.

India's Long-Term Sourcing Shift

Since 2022, after Western sanctions on Russia, India began purchasing Russian oil at a discount. Russian crude's share in India's import mix has risen from under 1% to over 40% in just over two years.

These oil flows are safer during regional conflict as they bypass Hormuz, traveling through:

Suez Canal

Cape of Good Hope

Pacific Ocean routes

India's Middle East oil imports between June 1-19 stood at 1.9 million bpd, projected to reach 2.0 million bpd for the full month-down from May's average by 100,000-150,000 bpd.

India's Contingency Plans

If the conflict escalates or disrupts the Hormuz route:

India may increase reliance on US, Nigeria, Angola, and Brazil

India may also tap into its strategic oil reserves that can cover 9-10 days of imports

India's pivot toward Russian and American crude oil reflects a proactive strategy to reduce dependence on the Gulf amid geopolitical uncertainties. As Iran-Israel tensions escalate and the Strait of Hormuz remains at risk, India's diversified energy strategy is key to maintaining supply stability and safeguarding economic interests.