Russia stands to gain from surging oil prices and renewed Indian interest in its crude as Middle East hostilities disrupt shipments through the Strait of Hormuz. With the vital waterway effectively closed, cargoes of Russia's Urals crude floating in the Arabian Sea offer a tempting alternative to short-haul Middle Eastern barrels.

Indian purchases of Russian crude fell to 1.11 million barrels a day in February, the lowest since November 2022, as China boosted its imports to a record 2.02 million barrels daily. Russian seaborne export volumes averaged 3.41 million barrels a day in the four weeks to March 1, down 465,000 barrels from pre-Christmas peaks. The amount of Russian crude on water has swelled to 140 million barrels since mid-December, up 65% from August.

Despite potential opportunities, Russia faces challenges including icy Baltic conditions and a drone attack on its Black Sea port of Novorossiysk that halted loadings. The longer voyages and delays involved in delivering Russian cargoes to China rather than India have kept the amount of its crude on the water close to 140 million barrels since mid-December. That's up by about 60 million barrels, or around 65%, since the end of August.