Indian refiners are procuring crude oil cargoes from Russia, the UAE and South America during August as disruptions persist in West Asia following the conflict impacting supplies through the Strait of Hormuz (SoH) and the Bab-el-Mandeb (BeM).
Sources pointed out that disruptions due to the West Asia conflict have impacted supplies from the region forcing vessels to take longer routes to bypass conflict zones.
“In such a scenario, Indian refiners have diversified supplies towards Russia, the UAE, West Africa and South America. Russian oil, as usual, is the main base followed by the UAE, Brazil and Venezuela. Sweet crude is coming from Nigeria, Angola and the US,” explained one of the sources.
Kpler said that despite the threat of the Graham Bill and potential secondary tariffs, Russia remains India’s largest crude supplier.
“The important distinction here is between policy risk and an immediate physical disruption to trade,” said the global real time data and analytics provider.
Sumit Ritolia, Kpler’s Lead Research Analyst for Refining & Modeling, told businessline, “Indian refiners typically procure crude several weeks in advance, so even if policy pressure increases, the adjustment would not necessarily be visible immediately in arrival data. We do not expect Russian imports to ease currently, given the overall global crude supply situation remains constrained.”
Replacing Russian crude completely would be challenging, particularly while Middle Eastern supply and logistics remain constrained. Replacing Russian barrels is technically feasible, but economically and politically fraught, he emphasised.
UAE crude oil
Another important trend, noted Ritolia, is the resilience of the UAE crude oil supplies to India.
“The UAE barrels continue to gain traction as the country has been relatively successful in maintaining exports despite regional disruptions, supported by pipeline infrastructure to Fujairah and offshore/ ship-to-ship logistics outside the SoH. This has allowed UAE crude flows to India to remain comparatively strong at a time when availability from several other Middle Eastern suppliers has been constrained,” he added.
What is worrying is the rising cost of buying crude oil at a time when rupee is weak against the US dollar, adversely impacting India’s import bill and current account deficit (CAD).
Tightening physical supplies are pushing up risk premiums on Middle East Gulf (MEG) and West African barrels, while at the same time Russian discounts are drying up and the lower price advantage on Venezuelan crude is shrinking fast.
Another development that can further add up to the cost of procuring crude oil is the latest US sanctions on Iran. If the sanctions impact China’s sourcing from the Persian Gulf nation, the reshuffling would lead to higher prices as India will have to compete for alternative sources.
Additional cost
Ritolia explained that there is clearly an additional cost associated with replacing nearby Middle Eastern supply with cargoes from the US and other more distant origins. Freight is higher because of the significantly longer voyage, while tighter global availability has also raised the underlying commodity cost. In the current environment, India is effectively paying a premium for supply security and diversification.
This diversification improves supply resilience, but it also comes at a cost through longer voyages, higher freight, and, in some cases, a less optimal fit with existing refinery configurations. Ultimately, India’s current sourcing pattern reflects a balance between availability, economics, crude/ product quality, and energy security, rather than simply a shift from one supplier to another.
Published on August 25, 2026
