India increased its crude oil imports to the highest level of 2026 in September. Total imports reached 5.26 million barrels per day (mbd). A sharp rise in supplies from Gulf producers drove the increase. The growth came despite continued risks around the Strait of Hormuz. More crude is now moving through the strategic waterway under alternative shipping arrangements. Iraq also became India’s second-largest crude supplier after Russia. This marked the first time Iraq held the second spot since the US-Iran conflict began in February. The higher Gulf supplies have also raised questions about Iran’s influence over oil traffic through the Strait of Hormuz.

Tankers Use Alternative Shipping Arrangements

Dozens of large crude tankers are reportedly passing through the Strait of Hormuz with their Automatic Identification System (AIS) transponders turned off. The tankers cross the waterway and then transfer their crude to other ships. These ship-to-ship (STS) transfers take place in UAE and Omani waters. Other vessels then carry the crude to customers. The original tankers return to Gulf terminals and load more oil. This system has helped restore Middle Eastern crude supplies to India. It has also reduced supply uncertainty for Indian refiners. Several Indian refineries depend on crude grades from the Middle East. The return of Gulf supplies therefore gives refiners more access to the crude they need. "Increased Middle East barrels availability not only helps restore some of the lost supply but also provides access to crude grades with relatively strong middle-distillate yields, which align well with India's domestic product demand slate," said Nikhil Dubey, lead analyst, refining at commodity analytics firm Kpler.

Iraq Becomes India’s Second-Largest Supplier

Kpler data showed that six Gulf countries supplied 39 per cent of India’s total crude imports in September. The group included Saudi Arabia, Iraq, the UAE, Kuwait, Oman and Qatar. Iraq supplied around 525,000 barrels per day (bpd). Russia remained the largest supplier. Iraq ranked second. Saudi Arabia supplied about 517,000 bpd. The UAE supplied around 438,000 bpd. Kuwait also increased its shipments. It supplied 335,000 bpd to India in September. That marked Kuwait’s highest supply level to India in one year. The recovery stands out because Iraqi and Kuwaiti crude supplies had almost disappeared from India’s import mix for several months. Their supplies fell sharply after the Iran war began on February 28.

Gulf Oil Gives Indian Refiners More Options

The return of Gulf crude gives Indian refiners more choices when they source oil. This flexibility matters as pressure grows over India’s purchases of Russian crude. The recent passage of the Graham Bill has added to the uncertainty. The bill gives the US president the power to impose tariffs of up to 100 per cent on India and other countries that buy Russian crude. "Ample Middle East barrels availability provides Indian refiners with additional sourcing optionality should they need to reduce their exposure to Russian barrels," Dubey said. More Gulf supplies could therefore help Indian refiners reduce their dependence on Russian crude if needed.

New Shipping Strategy Keeps Oil Moving

Gulf national oil companies and some international trading firms continue to arrange tanker movements through the Strait of Hormuz. They have continued these operations despite reports of attacks on vessels. The new shipping strategy uses AIS shutdowns and ship-to-ship transfers. This approach allows crude to keep moving through the region. It also limits the direct visibility of individual tanker movements. Saudi Arabia has also restored its East-West pipeline after Houthi attacks in September. Saudi Arabia has resumed loading crude at the Red Sea port of Yanbu. The port now provides another route for Saudi oil exports. The additional route can help Saudi Arabia move crude without relying entirely on shipments through the Strait of Hormuz.