Surging freight costs linked to the US-Iran war are making Russian crude less competitive to discounted Gulf oil, traders say

India’s imports of Middle Eastern crude have surged to more than half of its total oil purchases, as steep Gulf discounts and soaring freight costs make Russian supplies less competitive for Indian refiners.

Middle Eastern crude accounted for 54% of India’s oil imports in September, up from 32% in August, while Russia’s share fell to 33.5% from 46.6%, according to ship-tracking data reported by Reuters. Russia nevertheless remained India’s largest individual oil supplier.

The shift is reflected in purchases by state-owned Bharat Petroleum Corporation Limited (BPCL), which expects Russian crude volumes to decline significantly in November. Russian oil accounted for around 37% of BPCL’s crude sourcing during July-September.

India increased Russian oil purchases when the US-Iran war disrupted Middle Eastern supplies.…