Russian Oil Tankers Diverted to India: Global Supply Chain Impact

The disruption of crude oil supplies from the Middle East due to the war in Iran is creating a major geopolitical and trade shift in the global energy market. Following the US's temporary waiver allowing India to increase its purchases of Russian oil, several Russian oil tankers headed for China have diverted their routes mid-way and are headed for India. This development is a significant diplomatic step for India's energy security and the changing global supply chain.

According to ship-tracking data, an Aframax Russian tanker named 'Aqua Titan,' originally headed for the Chinese port of Rizhao, made a U-turn in Southeast Asian waters (South China Sea) in mid-March. The tanker departed from a Baltic Sea port in late January carrying 'Urals' crude oil and is now expected to arrive in New Mangalore on March 21. The tanker departed from a Baltic Sea port in late January carrying 'Urals' crude oil and is now expected to arrive in New Mangalore on March 21.

According to the latest data from Vortexa Limited, at least seven tankers carrying Russian oil have changed course from China to India mid-journey.

This strategic shift primarily came after the US gave India the green light to temporarily increase its purchases of Russian oil to compensate for losses incurred due to the Iran war. In the week following this significant concession, Indian refineries have rapidly purchased a massive 30 million barrels of Russian crude oil. Currently, all major Indian refineries are actively purchasing from Russia in the crude oil market.

According to Kpler and ship-tracking data, the Suezmax Juju N tanker, carrying Kazakh CPC Blend crude from Novorossiysk in Russia's Black Sea region to Rizhao, China, also changed course in early March. It is expected to reach Sikka, India, by March 25.

In recent months, as India reduced its purchases from Russia, China served as Moscow's last resort. However, the recent shift of Indian refineries toward Russian oil has sharply reversed the trade equation.

Following the expansion of the scope of permitted oil purchases from Russia, other buyers, such as Japan and South Korea, are also returning to the market. According to market analysts, this return of buyers could further boost global crude oil prices.

Amid the energy crisis in the Middle East caused by the Iran war, India's move represents a strong policy and commercial initiative to secure its domestic energy demand. The diversion of oil tankers from China to India highlights how rapidly global energy supply chains are adapting to new commercial realities.