How the Iran War Has Stoked Competition Between India and China for Russian Oil

Why It Matters

The scramble for Russian oil reshapes Asian energy security, pressuring India’s limited buffers while bolstering China’s supply resilience, and signals a shift in Saudi export strategy that could influence global crude pricing.

Key Takeaways

• India and China each securing ~1.6 mbd Russian crude in April
• India's oil buffer covers only about 30 days of supply shocks
• China's stockpiles sustain demand for 3‑4 months, easing pressure
• Saudi shipments favor China with 1.35 mbd versus 0.68 mbd to India
• Strait of Hormuz disruptions push Asian buyers toward cheaper Russian oil

Pulse Analysis

The Iran‑related attacks on energy infrastructure have effectively throttled Gulf oil flows, prompting Asian importers to hunt for alternatives. With the Strait of Hormuz operating at a fraction of its pre‑war capacity—China’s transit fell to 222,000 bpd and India’s to 247,000 bpd—both nations turned to Russian crude, which the U.S. waiver now permits to be purchased at sea. This geopolitical shock has revived demand for Russian oil, traditionally a discount‑priced, readily available source, and has reignited competition between the two largest Asian oil consumers.

India’s energy calculus is now under pressure. Roughly 47 % of its March imports came from Russia, up from 20 % in February, as the country seeks to offset the loss of Middle‑Eastern supplies. Yet its strategic reserves only cover about a month, and the government has resisted raising fuel taxes, keeping domestic demand steady. By contrast, China’s larger stockpiles can sustain three to four months of consumption, allowing it to negotiate from a position of strength while still needing Russian crude to feed its petrochemical and export‑driven industries.

Saudi Arabia, long a key supplier to the region, is subtly reshaping its export mix. In April it shipped 1.35 mbd to China, more than double the 0.68 mbd delivered to India, reflecting Riyadh’s growing refinery investments in the Red Sea corridor and its preference for the Chinese market. This tilt could cement a new supply pattern where Saudi oil complements Russian volumes for China, while India remains more dependent on the volatile Russian market. The evolving dynamics will likely influence crude price benchmarks and may prompt policymakers in New Delhi and Beijing to recalibrate their energy security strategies.