Iran restricts Strait of Hormuz: Why Russia may emerge as biggest oil beneficiary

Iran's warning that "no ship is allowed to pass the Strait of Hormuz" could do more than disrupt global oil supply - it may redirect trade flows in ways that strengthen Russia's position in Asian energy markets.

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Reuters reported that an official from the European Union's naval mission Aspides said on Saturday that vessels transiting the area have been receiving direct radio warnings. Ships were told via VHF transmission from Iran's Revolutionary Guards that "no ship is allowed to pass the Strait of Hormuz".

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About 20% of global oil supply - roughly 21 million barrels per day - passes through this narrow waterway. The Strait links Gulf producers such as Saudi Arabia, Iran, Iraq and the United Arab Emirates to global markets via the Gulf of Oman and the Arabian Sea.

Any sustained disruption would immediately affect China, the world's largest crude importer and the biggest buyer of Iranian oil.

China's exposure creates an opportunity for Russia 

China buys more than 80% of Iran's shipped oil, according to 2025 data from analytics firm Kpler. Iranian crude has limited buyers because of US sanctions aimed at cutting off funding to Tehran's nuclear programme.

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Kpler data show that China purchased an average of 1.38 million barrels per day of Iranian oil last year, representing about 13.4% of the 10.27 million barrels per day it imported by sea.

On Sunday, József Krieger, a social media user, said China can't buy oil because Iran has closed the Strait of Hormuz, and so they will buy it from the Russians. "Russia will make a lot of money from this war. If Zelensky doesn't reopen the Friendship Pipeline, we Hungarians will have enough oil. But where does Europe get oil from?"

The main Chinese buyers are independent refiners known as "teapots", clustered mainly in Shandong province. These refiners account for roughly a quarter of China's refining capacity and are drawn to Iranian barrels because of steep discounts. 

If Iranian shipments are interrupted because of Hormuz restrictions, these refiners would likely turn to Russia.

However, the potential benefit to Russia hinges on how long Iran sustains its actions; if the regime collapses early or a pro-US government emerges, energy flows could normalise and diminish that advantage.

Russian crude already on the rise

Reuters reported last month that China's Russian oil imports are set to climb for a third straight month to a new record high in February.

Vortexa Analytics estimated Russian crude shipments to China at 2.07 million barrels per day for February deliveries, up from January's 1.7 million bpd. Kpler's provisional data showed February imports at 2.083 million bpd, compared with 1.718 million bpd in January.

Since November, China has replaced India as Moscow's top client for seaborne shipments. Western sanctions over the war in Ukraine and pressure to clinch a trade deal with the U.S. have forced New Delhi to scale back Russian oil imports to a two-year low in December.

Kpler data show India's Russian crude imports are estimated to fall further to 1.159 million bpd in February.

The shift has widened Russia's pricing advantage. Urals crude for January and February deliveries to China has traded at a discount of $9 to $11 per barrel below benchmark ICE Brent - the lowest in years. Urals had typically landed in India because of shorter voyage times, but Chinese refiners have increasingly absorbed those barrels.

Independent Chinese refiners remain the world's largest consumers of US-sanctioned oil from Russia, Iran and Venezuela.

"For the quality you get from processing Russian oil versus Iranian, Russian supplies have become relatively more competitive," a senior Chinese trader who regularly deals with teapots was quoted as saying by Reuters.

India's exposure to Hormuz

The Strait of Hormuz is also critical for India. Data from commodity tracking firm Kpler showed in February that India's dependence on this chokepoint has surged to around 50% of its total crude imports and has been rising in recent months. So far this year, India imported nearly 2.6 million barrels per day from Gulf countries in 2026 till 24 February.

If Hormuz remains restricted, supply disruptions could lift global prices. But for Russia, already exporting record volumes to China, the redirection of demand away from Iranian barrels could provide an additional boost.

(With inputs from Russia)