India and China face off over Russian crude oil

India and China, the world’s major oil importers, are battling over the world’s scarce crude oil supplies as markets tighten due to disruptions in the Strait of Hormuz and stalled peace talks between the United States and Iran.

The two economic powers are currently locked in a fierce battle over limited supplies, primarily from Russia and, to a lesser extent, Saudi Arabia.

Muyu Xu, senior analyst at Kpler, told CNBC: “Competition between India and China for Russian crude oil is intense and will continue to be competitive for June-loading cargoes.”

On April 18, the United States renewed an exemption that allows countries to purchase sanctioned Russian crude oil at sea for about a month, easing pressure on global prices. However, sanctions on Iranian crude oil were not eased. Almost 98% of Iranian crude oil is destined for China, with only a small amount reaching India.

Iranian attacks on energy infrastructure in the Middle East have also disrupted oil supplies from Gulf states, increasing demand for Russian oil.

According to Kupler, China’s imports through the vital waterway fell to about 222,000 barrels per day in April, a sharp drop from 4.45 million barrels per day (MBD) before the start of the Iran war. India’s supply through this route has fallen to 247,000 barrels a day so far this month, down from 2.8 million barrels a day in February.

Both countries are currently seeking alternative supplies to fill the gap.

“With the de facto closure of the Strait of Hormuz, Asian countries are looking for readily available and cheap crude oil, and Russian crude falls into this category,” said Kpler’s Xu.

India appears to be more vulnerable to supply shocks. Oil industry experts say the country’s crude oil imports fell in March, leaving it with a limited buffer of about 30 days against a prolonged supply shock. Unlike other countries, the Indian government has not increased pump prices, so domestic demand for petrol and diesel has not declined, they added.

Meanwhile, China relies on the vital waterway for 45 to 50 percent of its crude oil imports, according to Columbia University’s World Energy Policy Center. However, oil reserves can meet three to four months’ worth of demand.

Mukesh Saadeb, chief oil analyst at energy intelligence firm XAnalysts, said China is in a better position than other Asian countries.

Still, the Chinese government needs crude oil imports to support its large export and petrochemical industries and to build up strategic stockpiles in case of a prolonged war, Saadeb said.

India imported a total of 4.57 million barrels of crude oil in March, of which 2.14 million barrels (47%) came from Russia, said Benjamin Tan, director and head of liquid bulk research at S&P Global Commodities at Sea.

This is almost twice as much as in February, when Russia’s share of India’s crude oil imports was about 20%, according to Kpler data. At the same time, India’s total oil imports fell by more than 14% from pre-war levels.

China’s crude oil imports also shrunk, with a volume decrease of 2.8% in March compared to the same month last year. With supplies from Iran limited, Beijing is turning to Russia to fill the gap.

China imported 1.8 million barrels of Russian crude in March, down slightly from 1.9 million barrels in February, according to Kpler data. But so far in April this year, India and China are at odds, with both countries having secured 1.6 million barrels of Russian crude oil.

Before the war, Indian refiners had cut oil imports from Russia following U.S. sanctions on two major oil companies in November. Washington has further stepped up its attacks on India, demanding that New Delhi reduce its dependence on Russian oil in exchange for a favorable trade deal with the United States.

By February, when India and the US finally agreed to a trade deal, India’s imports of Russian crude oil had fallen from 1.84 million barrels in November last year to about 1.04 million barrels in February 2026, according to Kupler data.

However, the conflict involving Iran reversed that trend.

In an interview with India’s NDTV, Denis Alipov, Russia’s ambassador to India, said, “India has been buying a lot of Russian oil recently,” and that the Russian government wants to maintain this level of energy cooperation in the future. He described U.S. tariffs and sanctions as “undue pressure.”

New Delhi needs to strike a favorable deal with the United States, but Russian oil has become critical to India’s energy security as conflicts in the Middle East continue.

“India has been more exposed to the recent disruptions than China due to its high reliance on Middle Eastern crude and relatively low inventory levels,” Lin Yeh, vice president of oil commodity markets at Rystad Energy, told CNBC.

He noted that while India has an increasing need for Russian crude oil, there is stiff competition from Chinese state-owned companies that have “returned to the market after sanctions waivers.”

Before the Iran war, India was replacing its crude oil imports from Russia with crude oil imports from Saudi Arabia.

New Delhi’s crude oil shipments from Saudi Arabia rose from an average of 638,387 barrels per day in 2025 to 1.03 million barrels per day in February, according to Kpler data. So far in April, Saudi Arabia has shipped 684,190 barrels of crude oil to India.

But much of Saudi supply goes to China through the Red Sea, and the country has significant refinery investments, giving Riyadh a vested interest in supplying more to China than India, said Saadeb of XAnalysts.

Saudi Arabia supplied 1.35 million barrels of crude oil to China in April, up from 1.04 million barrels in March but down from 1.67 million barrels in February, according to Kpler data.

Saadeb said that “in the case of an indefinite ceasefire, price becomes less important” and availability of supplies becomes the main issue.