India Shifts Back to Middle East Oil as Russian Supply Premium Shrinks

Middle Eastern producers captured 54% of India’s import market last month, bolstered by increased volumes moving through the Strait of Hormuz. Refiners leveraged a rise in spot cargo availability, utilizing ship-to-ship transfers in the Gulf of Oman to secure supply. This shift comes as Russian imports dropped 14% to 1.8 million barrels per day, shrinking Moscow's total market share from 46.6% in August to 33.5%.

Economic pragmatism remains the primary driver for Indian procurement strategies. With the price of flagship Urals crude climbing to parity with Middle Eastern grades, the historical discount that once favored Russian oil has largely evaporated. Facing direct competition from China—which has ramped up its own Russian intake following restricted access to Iranian oil—Indian refiners are prioritizing the shorter, more cost-effective transit routes from the Gulf. Industry insiders suggest this preference for Middle Eastern crudes will persist as long as current pricing dynamics and supply logistics remain favorable.