Hormuz Crisis Disrupts 13M bpd Oil Flow, India and China Turn to Russian Supplies

Gate News message, April 23 — Disruptions in the Strait of Hormuz and stalled U.S.-Iran peace talks have severely impacted oil flows, forcing India and China to scramble for replacement crude. Both countries are now turning to Russia as their primary alternative, with Saudi Arabia as a secondary option.

The U.S. renewed a waiver on April 18 allowing countries to purchase sanctioned Russian oil at sea for approximately one month, easing some pressure on global prices. However, Washington did not relax sanctions on Iranian crude. Nearly 98% of Iran's oil exports go to China, with smaller volumes reaching India. Iranian attacks on Middle Eastern energy infrastructure have also disrupted supplies from Gulf producers, further driving demand for Russian cargoes.

According to Kpler data, China's crude imports through the Strait of Hormuz collapsed to 222,000 barrels per day in April from 4.45 million barrels per day before the Iran conflict. India's supplies through the same route dropped to 247,000 barrels per day this month from 2.8 million barrels per day in February. For India, Russia has become central again: S&P Global Commodities at Sea reported India imported 4.57 million barrels per day in March, with 2.14 million barrels per day from Russia—a 47% share, up from approximately 20% in February. Saudi Arabia supplied 684,190 barrels per day to India in April, while routing much of its supply to China through the Red Sea, delivering 1.35 million barrels per day to China in April versus 1.04 million in March.

Russia's output has declined sharply due to Ukrainian drone strikes on ports and refineries. According to five sources and Reuters calculations, Russia cut production by 300,000 to 400,000 barrels per day in April—potentially the sharpest monthly decline in six years. Russian Finance Minister Anton Siluanov noted last Thursday that high oil prices would help offset the budget deficit. Russia made production data classified after the Ukraine war began in 2022, citing national security.