Crude oil shipments from the Gulf to India have surged to 1.52 million barrels per day (bpd), according to recent market intelligence and shipping data, as international sellers increasingly absorb the financial and logistical risks tied to shipping through volatile maritime corridors like the Strait of Hormuz.
What "Sellers Absorbing Transit Risks" Actually Means
The phrase refers to a meaningful shift in international trade terms and insurance burdens. Typically, buyers might shy away from purchasing crude on a Cost, Insurance, and Freight (CIF) basis from high-risk zones, given skyrocketing war-risk insurance premiums and the threat of physical asset loss. By choosing to absorb these costs themselves rather than pass them fully onto Indian buyers, Gulf exporters are effectively underwriting transit risk to preserve their position in one of the world's fastest-growing major oil markets.
India's Central Role in the Story
India, the world's third-largest oil importer, relies heavily on the Middle East for its baseline energy needs, with roughly 52% of its crude imports historically passing through the Strait of Hormuz — a share that has actually risen in recent months as Indian refiners have reduced their purchases of discounted Russian crude, which averaged around 1.15 million barrels per day in the first two months of 2026, down from 1.7 million b/d in 2025.
How Severe the Underlying Disruption Has Been
The broader context behind this rebound is a genuinely fragile regional supply picture. Only four vessels crossed the Strait of Hormuz on a recent Tuesday, down from seven the previous day and well below the 10-day average of 18, according to Reuters. The Bab-el-Mandeb waterway — linking the Red Sea to the Gulf of Aden and connecting West Asia to Asian and European markets — has faced its own renewed pressure following Houthi attacks on Saudi assets, with 22 vessels crossing on a recent Tuesday compared to 24 the day before.
The Saudi Pipeline Complication
Compounding the pressure, Saudi Arabia's East-West pipeline — which normally carries crude from the kingdom's eastern oil fields to the Red Sea port of Yanbu, allowing shipments to bypass Hormuz entirely — remains shut down following drone attacks that damaged the infrastructure. With the pipeline offline, Saudi Aramco has offered additional cargoes to Asian refiners through ship-to-ship transfers off Oman's Sohar port, outside the Strait of Hormuz, while also increasing crude loadings from the Ras Tanura and Juaymah terminals inside the Gulf — though those terminals remain on the Gulf side of Hormuz and don't constitute a complete bypass.
India's Diversification Strategy
India has been actively working to diversify its energy sourcing beyond Hormuz-dependent supply. Imports from non-Hormuz sources — including Russia, the United States, West Africa, and Venezuela — now account for a significant share of India's total supply, and the government has said it is working to increase those volumes further. Prime Minister Narendra Modi has said India is tapping 41 nations for energy amid the ongoing Hormuz tensions, with government officials describing the country as remaining "comfortable" with current supply levels while closely monitoring the situation.
Two Indian LPG Carriers Cross Successfully
In one notable sign of managed risk-taking, two Indian-flagged LPG carriers — Jag Vasant and Pine Gas — began transiting the Strait of Hormuz after receiving clearance for safe passage, navigating cautiously close to Iran's coastline near Qeshm and Larak islands as a precautionary shift from usual shipping lanes. Shipping patterns suggest Iran is exerting tighter, selective control over strait traffic, allowing certain vessels through after negotiations while restricting others.
Where the Real Risk Now Lies
Analysts caution that the immediate threat isn't a complete halt in crude supplies to India — it's whether alternative cargoes, routes, and existing inventories can continue absorbing the pressure if the broader regional disruption persists. Continued availability of Gulf crude doesn't guarantee it will remain cheap or easy to transport: longer or more complicated shipping routes raise freight and insurance costs, while a shrinking pool of vessels willing to operate through affected waters can push up transportation costs further, even without a full supply cutoff.
The LPG Angle
Beyond crude oil, India relies on the Gulf region for about 60% of its LPG consumption — cooking fuel used by millions of households — prompting the government to prioritize LPG production at domestic refineries, encourage substitution with kerosene and coal in lower-priority sectors like restaurants, and intensify diplomatic efforts to secure alternative supplies, including increased US LPG imports.
What's Next
With three critical elements of the regional supply chain still under simultaneous pressure — depressed Hormuz traffic, renewed Bab-el-Mandeb security threats, and the shutdown of Saudi Arabia's East-West pipeline — India's key challenge going forward is whether Gulf sellers' willingness to absorb transit risk, combined with continued diversification toward non-Hormuz sources, can keep pace if the underlying regional conflict drags on. For continuing coverage, see the full report.