State-owned Indian oil refiners are proactively locking in crude supplies for the coming months, responding to mounting disruptions in key energy routes and shifting supplier dynamics, as geopolitical tensions threaten global supply chains.
State-owned Indian refiners are moving unusually early to secure spot crude, as attacks on Russian energy infrastructure and uncertainty around the Strait of Hormuz sharpen concerns over supply in the months ahead. People familiar with the buying said processors including Indian Oil Corp. and Hindustan Petroleum Corp. have already covered part of their needs through October and are now seeking barrels for November, a longer horizon than their normal one- to two-month spot buying window.
The shift reflects a wider squeeze across two of the world’s most important oil routes. According to S&P Global, Indian importers are facing a dual bottleneck from the Strait of Hormuz and the Bab al-Mandab Strait, forcing refiners to move quickly to lock in cargoes for the fourth quarter. The Economic Times has reported that some state-run refiners are sitting on enough crude for roughly two months and are not in a hurry to resume purchases from West Asia, even if Hormuz reopens.
Russia has become India’s largest crude supplier in recent years, accounting for about half of purchases by state-run refiners, but those flows have recently weakened after repeated Ukrainian strikes on Russian energy and port facilities. At the same time, tensions over Iran and the risk of disruption in Hormuz have pushed Indian buyers towards alternatives such as Middle Eastern barrels that do not need to transit the chokepoint, West African crude and supplies from other non-Hormuz routes. The tighter market comes just as India heads into its stronger festival-season demand period in September and refineries are adding more than 500,000 barrels a day of processing capacity this year.
The buying also comes against a backdrop of geopolitical risk from the United States, where the Senate last week passed legislation authorising steep tariffs on major buyers of Russian energy, although the measures have not yet taken effect. India has said the proposal is an internal US matter. For now, refiners are broadening their sourcing while preserving flexibility, with several more tenders expected in the coming weeks as companies try to keep crude flowing into the final quarter of the year.
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