For four months, India has been silently working on a rerouting of its refinery supply as the world has been watching the Strait of Hormuz like watching a heart monitor. The numbers that come up this week make the game of the week, obvious. The country imported about 2.66 million bpd of Russian crude in the first 19 days of June, rising from 1.91 million bpd in May, and the month is expected to reach an all-time high. According to preliminary tanker data, Russia's volumes are reaching as high as 53.5% of all India's imports this month, with full-June volumes nearing 2.35 million barrels per day, surpassing the previous high of 2.2 million in May 2023. It's no longer an opportunist move for the third-largest importer of oil in the world. It is architecture.

The background is a crisis that started on 28 February when the United States and Israel launched an air war against Iran and in the first barrage killed the supreme leader of Iran, Ali Khamenei. In response, Iran has transformed the 21-mile Strait of Hormuz, the world's seaborne oil gullet, into a weapon, dotting it with mines, harassing merchant vessels and, in some instances, firing at them. For decades crude had been pumping and it was just shut off. In March, Brent surged above $120 per barrel, Qatar announced force majeure on gas shipments and gulf producers cut production by millions of barrels per day. The shock spread far beyond the Gulf European gas prices nearly doubled, the European Central Bank held off on rate cuts and importers from Pakistan to the Philippines lined up for gas. The more flexible Indian refining sector and the vastly larger Indian reserves were very helpful for India, which still had to scramble "better than most".

The real story is what India did with that scramble. New Delhi's refiners instead sought out the market where barrels were available and cheap. Russia was clearly the anchor. Urals and Sokol both have been trading at a significant discount to Brent since 2022, and with Gulf supply tapped down, the price difference proved to be too much to resist. The economics are simple: India is importing virtually all of the crude oil it consumes and a couple of dollars a barrel on two and a half million barrels a day adds up to billions of dollars annually in savings and a reduced import bill at a time when the rupee has been under stress. The rest of the heavy lifting was done by the Abu Dhabi link. In June, some 636,000 bpd were delivered from UAE, slightly below a record 644,000 bpd in May, valued more for proximity than price – a short voyage that reduces freight and insurance costs which have surged around the region.

As the above chart illustrates, the basket is anything but balanced. Crude produced by the U.S. plunged to 91,000 a day from 252,000 in May, while Venezuela rallied to 209,000, behind Saudi Arabia at 384,000. With the cheapest, closest and safest molecules coming from Russia and the Emirates, more expensive Atlantic and US products are squeezed out, even with sanctions politics. Indian refiners have also been relying on the Atlantic Basin and South American heavy crude since March, and an estimated 300,000-400,000 barrels a day of Venezuelan crude is flowing as plants are geared up to process heavier crude for feedstock. This diversification is genuine but it is a Russian sun.

That's where the more sober read comes in, and it's a read shared by analysts that actually model these flows, tanker by tanker. A reopening of Hormuz, when it decides to reopen, will not cure India of its former shopping habits, as the various fuels were not equally injured. Liquefied petroleum gas the cooking fuel used by hundreds of millions of Indian kitchens was the biggest loser and will be the first to benefit when Gulf flows begin anew. Crude and LNG, which were much more resilient through the disruption because of alternative sourcing and bypass infrastructure, are likely to normalise more slowly. All that will be accomplished in the initial stages of reopening, before Gulf producers can meaningfully resume exports, will be the clearing of stranded cargoes and the reopening of shipping lanes. As in this opinion, the reopening of the strait does not alter Russian crude's place in India's mix due to the underlying economics and the security-of-supply rationale that propelled the move. The crisis has been a magnifier of a trend that has been started in 2022, rather than an invention of one.

The difference in LPG gap closure provides an indication of supply chain "bendability". Amid a contraction in American crude supply, the U.S. has become a significant supplier of LPG to India since shipments from the Gulf were cut off last year and a long-term contract was instead signed with the U.S. Identical molecules, polar paths and the same buyer!

The remarkable thing about the record breaking June is that it is coming while the truce is in effect, and nobody seems to trust the truce. The two sides signed a memorandum of understanding on 17 June, at the same time Donald Trump and Iranian President Masoud Pezeshkian signed their names at a dinner at Versailles, on the sidelines of the G7. The deal was to provide a period of sixty days for negotiations of a more comprehensive settlement, free movement through Hormuz, removal of mines and the lifting of the blockade by the American navy. It functioned for a day or so dozens of tankers flooded from the Gulf en masse, and Washington boasted of the volumes. The US had moved 16 million barrels through the strait in one day, Vice President JD Vance said, a record even in pre-war days.

But the sunny outlook turned sour. On a Saturday, Iran's military reclosed the strait, citing ongoing Israeli activity in Lebanon, although Tehran's own foreign ministry maintained that shipping was proceeding as usual and the U.S. Central Command reported that shipping continued through the strait. The split-screen a military closure and a diplomatic process running at the same time left shippers paralysed. Some official sources have stated that ships have been moving through the strait, but independent vessel trackers showed no outbound commercial transits through the strait for around 72 hours between 20 and 22 June. The world's biggest tanker company has declared that they will be back in action weeks, if not a month. The diplomacy itself has faltered: the talks in Switzerland briefly broke off and were restarted as technical-level negotiations, in which Vance on 22 June described the latest round of talks as a good basis for a deal as Trump threatened about tolls and Lebanon.

It's the ambivalence that's being priced, not the headlines. Crude was trading at just under $77.5 a barrel on 22 June, a few cents higher for the day but almost 17% lower than it was in June, as the war-driven risk premium faded and still more than $60, the average of some forecasters' pre-war 2026 projections. Sentiment is the name of the game now, relative to supply. The same deal can cheer someone's mood almost overnight, and cannot re-mine a channel or re-open a shut-in oilfield in the same timeframe. The best estimate from industry is that it will take about six months to clear the mines, two to three months for tankers to turn around, and some producers still more time to restore prewar production. Even optimistically, UAE's own state oil company has suggested that 2027 would be when the passage of Hormuz is fully normalised.

That is the reason for India's sensible rather than the reckless stance. Abu Dhabi has not only offered spot cargoes, but has pledged to sell up to 30 million barrels of crude oil into India's strategic petroleum reserve a buffer against the next short, sharp shock (that it didn't have at this level prior to the shock). New Delhi sees energy security as more of an inventory- and relationships issue, rather than a price-of-the-week issue.

The more difficult questions are further away. The pressure on Russian crude from western sanctions has by no means disappeared and some forecasters think that India's Russian consumption may find a structural low perhaps at 0.8/1.0 mbd in a normalised world, when Chinese refiners take up the marginal barrel at a discount. Whether it will be a high point or a new plateau in June 2026 will depend on the sustainability of the discounts, the ticking of the sixty-day countdown in Switzerland and whether, finally, the Lebanon clause of the ceasefire can be defused. For now, the message from the Indian ports is clear and of global ramifications: that the lowest-cost insurance policy for a major economy in a world defined by weaponized chokepoints is a diversified barrel today, and the reassurance of calm tomorrow. The truce might last or it might fray, but India has cast its votes in tanks already.