Indian refiners bought 60 million barrels of Russian crude oil since March 5

SEATTLE (Oil Monster): Indian refiners shifted back to Russian crude oil buying around 60 million barrels of the geopolitically sensitive commodity from Moscow since March 5th as closure of the strait of Hormuz (SoH) impacted 40 per cent of its imports.

The Oxford Institute for Energy Studies (OIES) in its recent energy comment pointed out that the scale of the SoH disruption is like “no other seen in oil market history”.

In such a scenario, one of the US tools to help put a lid on crude oil prices has been granting exemptions on sanctioned barrels.

Russia has been a clear beneficiary of this measure, OIES pointed out.

Before the war, pressure was building on the Russian oil supply chain. US sanctions against Rosneft and Lukoil in November 2025 drove India to reduce its reliance on Russian Urals, pivoting instead to greater Middle East term volumes. A full pivot has been made back to Russian oil, the OIES commentary said.

“Indian refiners have bought up around 60 million barrels of Russian crude since the US issued a sanctions waiver on 5 March. The US reprieve on Russian oil has led to a major repricing of Urals and ESPO in the physical market with reports indicating that these have traded at premiums to their benchmarks,” it added.

India’s importance as a key distillate swing supplier further increases the likelihood that India’s compliance with US sanctions on Russia going forward could ease.

Asian countries outside China are highly exposed to the flow disruption from the SoH both in terms of availability of crude and products supplies and higher prices, OIES said.

For countries such as India and Japan, it added that crude imports through the SoH stood at above 40 per cent and 70 per cent, respectively. For India, the LPG and ethane exposure stand at above 80 per cent while for Japan, the naphtha exposure is around 70 per cent.

The oil market has been reacting in phases as new information continues to emerge. In the initial stage, the focus has been centered on the disruption of oil trade flows through the SoH with a prevailing view that the disruption will be short-lived and that the existing ‘oil glut’ will provide an effective cushion.

As the disruption to the SoH persisted, the market shifted into a new phase: the conversion of flow disruptions into large production losses, OIES said.

“At the current stage, with no clear visibility as to when trade will resume through the SoH, the market is not only assessing whether output losses could worsen but also how quickly production and refinery runs could recover in the light of the shut ins and damage to physical infrastructure,” OIES said in its March 26 energy comment.

Alongside the limited effectiveness of buffers and a belief that the war will result in a structural change in the geopolitics of the Middle East, this is causing a repricing of the entire forward curve, it added.

 Courtesy: www.thehindubusinessline.com