Source: Russia is ready to divert oil from Middle East to India due to Middle East conflict disrupting flows.

An 'industry source' with direct knowledge said that Russia was ready to divert oil from the Middle East to India in order to counter supply disruptions. About 9.5 million barrels of Russian crude are currently on vessels near Indian waters, and could arrive within weeks.

Sources declined to reveal the original destination of the non-Russian cargoes, but they said that they could be delivered to India in a matter of weeks. This would provide refiners with immediate relief.

India is susceptible to supply shocks. Crude stocks cover only 25 days' worth of demand. Refiners also have limited inventories of gasoline, gasoil and liquefied petrol gas.

A source in the Indian government said that New Delhi was looking for alternate supplies to prepare for a continuing conflict in Middle East past 10-15 days.

FORCED TO SEEK AN ALTERNATIVE SUPPLIER

Source: The disruption is having immediate market effects. About 40% of India's crude oil imports move through the Strait of Hormuz - the world's main oil export route.

Indian refineries process approximately 5.6 million barrels of crude per day. The Strait is now inaccessible following Iranian attacks on vessels that followed U.S.-Israeli strikes on Iran's targets which began on Saturday.

An anonymous industry source said that Russia is'ready to help India to meet up to 40% its crude oil needs.

Industry data shows that India's imports from Russia of about 1.1 millions barrels per day fell to around 21.2% in January as New Delhi sought relief against U.S. tariffs. Source: The share of Russian crude oil imports has risen to 30% in February.

Two sources in the refining industry said that Indian refiners have regular contact with traders who sell Russian crude. However, any increase in the intake of Russian crude would depend on the government's guidance as the trade talks with the United States progress.

Last month, Donald Trump agreed to remove punitive tariffs on Indian imports due to its purchase of Russian crude oil. He said that New Delhi had agreed to "stop purchasing Russian oil."

India insists that it has not done this, and its strategy is to diversify the supply in accordance with market conditions as well as "evolving global dynamics."

The Russian Embassy in New Delhi and the Indian Foreign and Oil Ministries did not respond immediately to a question about any increased purchases from Russia. A source in India said that days before the Iran War, 'Indian oil companies were not told to shun Russian crude.

Oil - 'A Seller's Market'

The Russian oil market has historically been a seller's market, with prices discounted from global levels since 2022 when the country invaded Ukraine. This will change now that "it is a sellers' marketplace," said an industry source familiar with the Russian oil trade.

Sources said that Russia is also willing to sell liquefied gas to India, after the top supplier Qatar stopped production on Monday due to the escalating conflict.

According to reports, Indian companies have cut gas supplies to industrial customers in order to cope with the shortage.

India is Asia's largest energy consumer and sources about half of its crude oil imports from the Middle East. However, India has far less in storage than China, making it more vulnerable to regional supply disruptions, as Russian purchases were reduced under U.S. influence.

Trump said Tuesday that the U.S. Navy would escort tankers through the Strait of Hormuz, if needed. He also ordered the U.S. International Development Finance Corporation (IDFC) to provide political risks insurance and guarantees for Gulf Shipping.

(source: Reuters)