The crisis around the Strait of Hormuz has become a severe stress test for Gulf crude oil suppliers and their key customers. Despite repeated assurances from US officials that the waterway was never officially blocked, satellite tracking shows that no oil or product tankers have moved through the strait since March 1. China and India together consume tens of millions of barrels of oil per day, and both are structurally dependent on Gulf crude. China has steadily expanded its purchases of Russian oil since 2022, still sourcing nearly 1/3 of its crude imports from the Gulf. Meanwhile, India has deliberately reduced its previously heavy reliance on Russian barrels and is replacing them with Middle Eastern supplies. With the Iran crisis unfolding and Hormuz traffic not expected to normalize quickly, the two Asian giants may turn to their longtime supplier in Moscow like never before. The key question is: Does Russia have enough export capacity to meet the sudden increase in demand?
The change in India’s shopping patterns has been particularly evident in recent months. India’s Russian crude oil imports fell from 1.85 million b/d in November 2025 to just 1.06 million b/d in February 2026. Much of the remaining flow is concentrated in one outlet: the Vadinar refinery, operated by Naira Energy, which is partly owned by Rosneft. In February, more than half of Russian crude to India (about 510,000 b/d out of a total of 1.06 million b/d) was imported there. In November 2025, the share was significantly smaller, with 560,000 b/d flowing to Vadinar out of a total of 1.85 million b/d imported. The retreat from Russian supplies was largely driven by increased pressure from Washington, which prompted Indian refiners to stop buying Russian barrels. Iraq, Saudi Arabia, UAE and Kuwait accounted for more than half of India’s total imports at 5.18 million b/d by February 2026, up from just over 2 million b/d in November 2025 to nearly 2.8 million b/d. The nearly 1 million b/d reflects an increase in the relatively low Gulf legal rate. This assumption is now being seriously tested, as a significant portion of this cargo is effectively stranded in Gulf waters awaiting safe passage through the Strait of Hormuz. The turmoil is likely to force New Delhi to reconsider its recent divestment from Russian supplies — assuming those barrels are still there.
Related: How China’s Rare Earth Ban Faced US Technology Success
China faces a challenge of its own. In February 2026, Russian crude oil imports reached a new record of 1.92 million b/d. Yet the Iran crisis is affecting Chinese refiners on two fronts. Unlike India, China was also a major buyer of Iranian crude, importing about 1 million b/d in February. In the same month, combined imports from Kuwait, Iraq, UAE and Saudi Arabia were around 3.4 million b/d. Combined, the potential loss of Iranian supplies and disruption to Gulf shipping threaten more than 1/3 of China’s crude imports. In this context, the Russian barrel looks attractive both politically and logistically. Underground pipeline flows and shipments from Russian Far Eastern ports offer one of the few large-scale supply channels that completely cross the Gulf.
Tanker’s recent moves indicate how the market is already set up. A wave of US enforcement actions against Venezuelan oil exports has left several VLCCs idle in Asian waters. Many of these vessels have previously been used to collect Venezuelan crude oil via ship-to-ship (STS) transfers. With these flows disrupted, many VLCCs became redundant. It appears that Russia is quickly stepping into this logistical void. Although Russian exporters rarely relied on VLCCs in the past, at least 8 such vessels are currently located in the Arabian Sea and Singapore, either en route to China or waiting offshore. There are 12 million barrels of medium-drained Urals by VLCCs alone, not counting Russian Far East grades, surpassing the previous record of 9.8 million barrels from February 2023. Most of the cargo they carry is already committed to Chinese buyers, offering little hope to India’s supply concerns.
How much extra Russian oil is there now? Floating stocks suggest that Russia’s additional export capacity may be limited. Russian crude oil inventories at sea rose steadily until late January 2026, reaching around 19.6 million barrels. Since then, they have steadily declined. As of early March, only 12 ships remained in the current stockpile, totaling about 7 million barrels, and many of these tankers are already anchored near Chinese ports awaiting the signal to unload. In other words, on short notice the pool of unsold Russian crude oil has been reduced significantly.
Related: No Missiles, No Drones: What Happens When Rare Earths Go?
Price dynamics are also changing. Market analysts report that the Hormuz disruption has reduced Russia’s Urals grade discount to Brent from around $10/bbl to $5-6/bbl. Meanwhile, Russia may soon have excess crude for export as domestic refining activity has slowed. Russian refinery output fell from 5.5 million b/d in December 2025 to around 5.15 million b/d in February 2026. Part of the decline was after drone strikes on two refining facilities, including the Volgograd refinery (300,000 b/d capacity) and the Okhta refinery (300,000 b/d capacity). Planned maintenance at several other plants scheduled for March and April is expected to further reduce domestic crude demand, potentially freeing up additional barrels for export.
Moscow’s most likely strategy in the current environment would be to play its two biggest Asian clients against each other. In recent months, Russian exporters have often stockpiled unsold cargoes in tankers near Singapore or off the Chinese coast, a tactic that has meant an unintended oversupply and a wide discount to prices. The current market situation is significantly different. With most floating cargo already allocated and supply chains in the Gulf disrupted, the next wave of Russian barrels is yet to be seen. The decline has given Russian sellers leverage to raise prices by pointing to strong demand from rival buyers. For both India and China, the Hormuz crisis may lead to the same result: Russian crude remains one of the few reliable alternatives – but it may no longer be as cheap and plentiful as it once was.
By Natalia Katona for Oilprice.com
Oil Price Intelligence brings you signals before they hit front page news. This is the same expert analysis read by experienced traders and political consultants. Get it twice a week for free, and you’ll always know why the market is moving against everyone else.
You get geopolitical intelligence, secret inventory data, and market waves that move billions – and we’ll send you $389 in premium energy intelligence, just for joining. Join 400,000+ readers today. Get instant access by clicking here.
