India’s oil provide chain faces renewed geopolitical danger after the US and Israel launched coordinated strikes on Iran on February 28, heightening considerations over potential disruption within the Strait of Hormuz — a important artery for the nation’s crude imports.
In keeping with knowledge from analytics agency Kpler, practically 50% of India’s complete month-to-month crude oil imports transited by means of the Strait of Hormuz throughout January–February, up from 40% in November–December 2025. A blockade or extended disruption may subsequently affect as a lot as half of India’s inbound crude volumes.
2.6 Million Bpd in danger
“A disruption on the Strait of Hormuz would have rapid and vital implications for each India and world oil markets, as roughly 2.6 million barrels per day (bpd) of India’s crude imports transit the Strait,” mentioned Sumit Ritolia, Lead Analysis Analyst – Refining and Modelling at Kpler, informed Moneycontrol. These provides primarily originate from Iraq, Saudi Arabia, the UAE and Kuwait.
India’s dependence on the route has risen over the previous two months, with Hormuz-linked imports growing to 2.6 million bpd in February (month-to-date), in contrast with 2 million bpd final 12 months. The shift displays India’s recalibration away from Russian crude and a return to conventional Center Jap suppliers.
Restricted bypass choices
Within the occasion of a blockade, India might discover crude routed by way of bypass infrastructure resembling Saudi Arabia’s East-West pipeline (to the Crimson Sea) and the UAE’s Abu Dhabi Crude Oil Pipeline (to Fujairah), each designed to bypass Hormuz.
Nonetheless, Ritolia cautioned that these pipelines have finite capability and are prioritised based on producer export methods. “They’ll mitigate however not totally offset a significant Hormuz disruption. Entry would rely upon producer allocation selections and industrial negotiations,” he mentioned.
If Center Jap flows are constrained, India could also be compelled to extend purchases of Russian crude regardless of ongoing Western scrutiny. Final 12 months, the US imposed sanctions on main Russian oil producers Rosneft and Lukoil, and President Donald Trump not too long ago said that India had agreed to halt Russian oil purchases as a part of a broader bilateral understanding.
Various sourcing choices embody the USA, West Africa (Nigeria, Angola), and Latin America (Brazil, Colombia, Venezuela). Whereas these routes guarantee provide continuity, longer voyage distances would increase freight prices and modestly improve landed crude costs within the close to time period.
Import tendencies and value affect
Kpler knowledge exhibits India imported 1.15 million bpd of Russian oil in February (month-to-date), up from 1.09 million bpd in January. Imports from Iraq declined to 942,000 bpd from 1.02 million bpd, whereas Saudi Arabia’s exports to India rose to 1.11 million bpd from 774,000 bpd.
Whole crude imports stood at 5.47 million bpd in February (month-to-date), in contrast with 5.14 million bpd in January and 4.78 million bpd in February 2025.
A Hormuz disruption would seemingly set off a pointy geopolitical danger premium in oil markets. “Brent costs may rise even earlier than bodily shortages materialise,” Ritolia famous, including that India would face increased import payments, freight and insurance coverage spikes, short-term provide tightness, and stress on the rupee and financial balances.
Round 20% of world oil and petroleum liquids consumption passes by means of the Strait of Hormuz, mentioned Prashant Vasisht, Senior Vice President and Co-Group Head, Company Rankings at Icra. “Any disruption can have broader repercussions throughout world power markets,” he mentioned.
India’s refined product exports is also affected. To this point this 12 months, India exported 74,000 bpd of refined merchandise by way of Hormuz, up from 55,000 bpd in 2025. Whereas cargoes might be redirected towards Europe, Africa or Asia-Pacific, transport occasions and freight charges would improve.
OPEC+ response
OPEC+ is weighing a probably larger-than-expected manufacturing improve at its assembly on Sunday, based on two sources acquainted with the discussions who spoke to Reuters. The transfer comes as Saudi Arabia and the United Arab Emirates have already stepped up exports in anticipation of potential provide disruptions following the US-Israeli strike on Iran.
Eight members of the alliance — Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria and Oman — are scheduled to satisfy at 1100 GMT. Delegates had earlier indicated the group was more likely to approve a modest output improve of 137,000 barrels per day (bpd) for April. The deliberate hike was supposed to align with rising seasonal demand, notably from the US summer season driving season, and adopted a run-up in crude costs forward of the strike on Iran.
A rise in April would formally finish a three-month pause in manufacturing hikes. Nonetheless, the dimensions of any extra increment past the beforehand mentioned 137,000 bpd has not but been finalised, one of many sources mentioned. Each people declined to be named because of the sensitivity of the talks. Bloomberg earlier reported {that a} bigger hike was into consideration, citing a delegate.
Exports already rising
Market alerts counsel that some Gulf producers have moved pre-emptively. With tensions escalating in current weeks and considerations mounting over potential disruption to regional exports, main Center Jap suppliers seem to have elevated shipments.
Abu Dhabi is anticipated to lift exports of its flagship Murban crude in April, based on two commerce sources cited by Reuters. Saudi Arabia has additionally lifted manufacturing and exports as a part of contingency planning, sources mentioned earlier this week.
The eight OPEC+ members had beforehand agreed to lift manufacturing quotas by roughly 2.9 million bpd between April and December 2025 — equal to about 3% of world oil demand. Additional will increase had been paused from January by means of March 2026 as a result of seasonal demand softness. The upcoming assembly now takes place towards a markedly extra unstable geopolitical backdrop.
