India's crude imports hit 2026 high in September as Gulf supplies surge despite Hormuz risks

New Delhi: India's crude oil imports scaled a year-high of 5.26 million barrels a day (mbd) in September, driven by a surprise surge in Gulf supplies.

Iraq emerged as the second-largest supplier, behind Russia, for the first time since the US-Iran conflict began in February. The sharp increase in volumes moving through the Strait of Hormuz has been enabled by a workaround adopted by Gulf producers and traders, raising questions about whether Iran's control over the waterway is weakening.

Dozens of large crude carriers are now crossing the Strait of Hormuz with their Automatic Identification System (AIS) transponders switched off, before transferring their cargo through ship-to-ship (STS) operations in UAE and Omani waters. Other vessels then carry the crude onward to customers, while the original carriers return to Gulf terminals for another run. The restoration of Gulf supplies has come as a relief to Indian refiners, many of which are configured to process Middle Eastern crude.


"Increased Middle East barrels availability not only helps restore some of the lost supply but also provides access to crude grades with relatively strong middle-distillate yields, which align well with India's domestic product demand slate," said Nikhil Dubey, lead analyst, refining at commodity analytics firm Kpler. The increased availability of Gulf crude is particularly important following the recent passage of the Graham Bill, which empowers the US president to impose tariffs of up to 100% on India and other buyers of Russian oil.

"Ample Middle East barrels availability provides Indian refiners with additional sourcing optionality should they need to reduce their exposure to Russian barrels," Dubey said. Saudi Arabia, Iraq, the UAE, Kuwait, Oman and Qatar accounted for 39% of India's total crude imports in September, according to Kpler. Iraq supplied 525,000 bpd, followed by Saudi Arabia at 517,000 bpd and the UAE at 438,000 bpd. The biggest surprise came from Kuwait, which supplied 335,000 bpd, its highest volume in a year.

Supplies from Iraq and Kuwait had nearly disappeared from India's import slate for months after the start of the Iran war on February 28. National oil companies in the Gulf, along with some global traders, are arranging ships and taking the risk of crossing the Strait of Hormuz even as some attacks on vessels continue to be reported. Saudi Arabia's crucial East-West pipeline, which was attacked by the Houthis in September, has also resumed operations and begun loading crude at the Red Sea port of Yanbu.