India and China Clash Over Russian Crude as Hormuz Closure Tightens Global Supply

The ongoing conflict involving Iran and the subsequent shutdown of the Strait of Hormuz have forced Asia's two largest oil importers, India and China, into a direct scramble for limited global crude supplies. With the critical waterway largely impassable, both nations have shifted their focus toward Russian crude to mitigate the shock. While the U.S. recently provided a temporary waiver for sanctioned Russian oil to ease global price pressure, the lack of relief for Iranian crude—of which 98% typically flows to China—has further intensified the demand for Moscow's exports. The disruption is evident in the shipping data: Chinese imports through the Strait plummeted from 4.45 million barrels per day (mbd) to approximately 222,000 bpd in April. India saw a similar collapse, with volumes dropping from 2.8 mbd in February to 247,000 bpd this month. India appears significantly more vulnerable to these supply shocks. With a limited buffer of approximately 30 days and a government policy of maintaining stable domestic pump prices, demand for fuel remains high despite the shortage. In contrast, China possesses a larger strategic reserve capable of meeting demand for three to four months, though Beijing still requires consistent imports to support its massive petrochemical and export industries. By April, the competition for Russian oil reached a stalemate, with both India and China securing 1.6 mbd of Russian crude. This marks a sharp reversal for India, which had previously reduced its reliance on Russian oil to secure a favorable trade deal with the United States. However, the urgency of the current energy crisis has overridden previous diplomatic constraints, pushing New Delhi back toward Moscow.