With oil supplies from the Middle East off-limits to India following the Strait of Hormuz blockade, Russia appears to have emerged as the world's must-have crude supplier for ensuring a nation's energy security.
"It must be noted that over time, oil has become a crucial element in the relationship between India and Russia, as India has been able to secure cheap oil from Russia, thereby ensuring that its citizens do not have to bear the brunt of rising fuel prices," Dr Pavan Chaurasia, a West Asia pundit and a Research Fellow at the Delhi-based India Foundation, told Sputnik India.
The closure of Hormuz, therefore, creates an opportunity for Russia to increase its oil sales to India. This is clearly a win-win situation for both parties, he added.
Interestingly, the US announced that it had allowed India to buy Russian crude for 30 days, something India has already been doing, according to various market intelligence organisations, the geopolitical expert highlighted.
Interestingly, the US announced that it had allowed India to buy Russian crude for 30 days, something India has already been doing, according to various market intelligence organisations, the geopolitical expert highlighted.
"For Russia, this has provided a temporary uplift in revenues, particularly as Asian importers, including India, seek to diversify supplies to maintain energy stability," Chaurasia stressed.
These waivers have more to do with developments in West Asia than with a realisation by the Collective West that sanctions have failed to deter Russia or harm its economic interests. Moreover, the US and its European allies may reimpose sanctions once the Strait of Hormuz reopens for traffic, he reckoned.
Nonetheless, the development is an admission on the part of the US that the global energy market is very complex and cannot be fully covered without considering Russia's large energy pool, the strategic affairs analyst emphasised.
Nonetheless, the development is an admission on the part of the US that the global energy market is very complex and cannot be fully covered without considering Russia's large energy pool, the strategic affairs analyst emphasised.
"Besides, Western sanctions are driven more by the geopolitics of these countries rather than by some set principles, and the recent US decision to allow India to buy from Russia is a testimony to it. As for India, it has always maintained that it will take oil from the cheapest and most reliable source, and its decision will not be guided by the whims of any other country," Chaurasia underlined.
Meanwhile, Arpit Chandna, an energy specialist with the London Stock Exchange Group (LSEG), stated that India and China were already moving in different directions when it comes to crude oil sourcing, even before the Middle East conflict began.
"Once the Strait of Hormuz reopens, Middle East crude is likely to become important again. Middle East producers may cut their official selling prices (OSPs) to win back market share, but how much they cut prices will decide how much volume actually returns. India is very sensitive to high oil prices, so buying Russian crude helps reduce the pressure from rising oil costs," Chandna said in an interview with Sputnik India.
China, on the other hand, uses Russian crude as a strategic hedge. State‑owned refiners and large crude stockpiles make China less sensitive to price changes. As a result, the Russian crude volumes that India has stepped away from have been moving to China, and this trend is likely to continue even after Middle East suppliers return to the market, he pointed out.
On the other hand, Sumit Ritolia, Lead Research Analyst – Refining & Modelling, at real-time cargo tracking firm Kpler, believes that with nearly 50% of India’s crude imports transiting the Strait of Hormuz, the country remains highly exposed to potential supply disruptions.
The US waiver allowing additional purchases of Russian crude over baseload offers short-term relief, though competition from Chinese buyers for the same barrels could limit the extent of India's benefit, he suggested.
On the other hand, Sumit Ritolia, Lead Research Analyst – Refining & Modelling, at real-time cargo tracking firm Kpler, believes that with nearly 50% of India’s crude imports transiting the Strait of Hormuz, the country remains highly exposed to potential supply disruptions.
The US waiver allowing additional purchases of Russian crude over baseload offers short-term relief, though competition from Chinese buyers for the same barrels could limit the extent of India's benefit, he suggested.
For Indian refiners, renewed access to Russian crude would support feedstock security and margins. Yet, there has been no official indication of product export curbs from the Indian government. In the near term, refiners are likely to prioritise domestic fuel availability and comfortable stock levels, meaning the increase in crude availability may not immediately translate into higher product exports. Export flows would likely rise only once domestic requirements are satisfied, he assessed.
From a market perspective, the policy shift could also tighten the availability of Russian export barrels globally. As Indian refiners re-enter the market for these grades, the discounts previously associated with Russian crude could narrow significantly, and prompt cargoes may even trade at premiums if competition for available barrels intensifies, the observer summed up.
From a market perspective, the policy shift could also tighten the availability of Russian export barrels globally. As Indian refiners re-enter the market for these grades, the discounts previously associated with Russian crude could narrow significantly, and prompt cargoes may even trade at premiums if competition for available barrels intensifies, the observer summed up.