India’s crude oil imports have bounced back to near pre-conflict levels despite prolonged disruptions in the Middle East, as refiners adjusted their sourcing mix and leaned more on alternative suppliers. According to an HSBC Global Research report, Indian refiners managed to offset the impact of the Strait of Hormuz crisis by cutting reliance on traditional Gulf suppliers and stepping up purchases from Russia, the United States, Oman, West Africa and South America.“After a dip in March, Indian crude imports have broadly returned to pre-conflict levels as refiners replaced Middle East supplies with alternatives from Russia, the US, Oman, West Africa and South America,” the report said.HSBC notes that Russia continues to be a preferred supplier for India due to its pricing edge. “Russian oil is trading at a small discount to Brent, making it attractive to Indian refiners.” It also points out that Russian crude availability has increased after Ukrainian strikes on refineries reduced domestic processing, allowing more oil to be diverted to export markets.Even though Gulf exports are recovering following the reopening of the Strait of Hormuz, HSBC expects Asian refiners, including India, to hold back from significantly ramping up purchases from the region in the immediate term. The report says refiners across Asia have already covered cargo requirements for July and August and are currently entering maintenance schedules, which is limiting spot buying activity.On Iran, the report says Indian refiners remain cautious despite a temporary easing in US sanctions. “Indian refiners are cautious about buying from Iran unless US sanctions waivers are extended beyond August.”HSBC also points out that the reopening of the Strait of Hormuz has created a short-term surplus of Middle Eastern crude in global markets, as previously stranded shipments are being released faster than they can be absorbed. However, the report said that the situation is expected to be a temporary “mini-glut” that will ease as inventories are rebuilt and strategic petroleum reserve releases wind down.Overall, HSBC said, India’s diversified sourcing strategy has helped ensure steady crude inflows despite geopolitical disruptions. By shifting quickly towards discounted Russian barrels and other Atlantic Basin supplies, refiners have been able to maintain import stability while reducing exposure to Middle East supply risks. The report added that India is likely to continue balancing its crude imports across multiple regions, guided by price and geopolitical considerations as Gulf supply conditions stabilise.
