Summary
India’s oil imports have undergone a significant shift, with the country recently becoming the world’s third-largest buyer of Russian crude oil as of late 2025. Historically, India’s crude oil imports were dominated by Middle Eastern countries, but the onset of the Russia-Ukraine conflict and resulting Western sanctions on Russian energy exports led India to substantially increase its purchases of discounted Russian crude. At its peak, Russian oil constituted nearly 45% of India’s crude imports, driven by economic incentives and the strategic goal of diversifying away from traditional suppliers.
However, this trend experienced a notable reversal in December 2025, when India’s imports of Russian crude declined sharply, causing the country to fall behind Turkiye as the second-largest buyer. The reduction stemmed largely from tightening U.S. sanctions on key Russian oil producers like Rosneft and Lukoil, coupled with secondary tariffs imposed on Indian goods linked to these imports. Major Indian refiners, including Reliance Industries and state-owned firms, scaled back their Russian crude purchases, while simultaneously increasing procurement from Middle Eastern producers and other global sources to mitigate geopolitical and financial risks.
Despite the decline, Russian crude remains a significant component of India’s energy mix, underscoring a complex balancing act between securing affordable energy supplies and navigating international diplomatic pressures. India continues to utilize various channels, including non-sanctioned intermediaries and “shadow tankers,” to maintain Russian crude flows, while also advancing broader energy security strategies such as expanding strategic reserves, investing in upstream assets abroad, and promoting alternative fuels. These measures reflect India’s pragmatic approach to energy diversification amid rising demand projected to nearly double by 2040.
India’s sustained engagement with Russian oil has drawn international scrutiny, particularly from the United States and the European Union, which view the imports as undercutting the effectiveness of sanctions aimed at isolating Russia economically. Washington’s imposition of tariffs and potential trade penalties exemplifies the geopolitical tensions at play, highlighting the challenges India faces in balancing its energy needs with competing strategic alliances. This evolving dynamic underscores India’s pivotal role in global energy markets and the broader geopolitics surrounding Russian crude exports.
Background
India has emerged as the world’s third-largest importer of crude oil, heavily reliant on imports to meet over 85% of its crude oil needs. This dependency underscores the country’s critical need for energy security, especially as its primary energy demand is projected to nearly double by 2040, driven by a significant increase in GDP to an estimated USD 8.6 trillion. To address these challenges, India has implemented a multi-faceted strategy that includes diversifying crude oil import sources, investing in overseas upstream oil projects, expanding strategic petroleum reserves, increasing biofuel blending, and promoting alternative automotive powertrains.
Historically, Russian crude oil played a substantial role in India’s import portfolio. At its peak, Russian oil accounted for nearly 45% of India’s crude imports, reinforced by discounted pricing that made Russian crude economically attractive compared to other sources. India’s imports from Russia increased markedly following the onset of the conflict in Ukraine, with Prime Minister Narendra Modi affirming India’s intent to continue purchasing discounted Russian crude despite Western sanctions imposed on Russian oil companies. The relationship has been supported by a strategic approach that treats Russian petroleum as both a practical and economic buffer while supplementing supplies from the United States and Atlantic Basin countries to diversify supply alternatives.
However, India’s crude import strategy has evolved amid growing geopolitical complexities. Sanctions, insurance risks, and tightening international trade policies have introduced new challenges, leading major Indian refiners to adopt a more cautious approach to Russian oil purchases. Energy trade decisions increasingly intertwine economic, strategic, and geopolitical considerations, especially as trade concessions, tariff threats, and diplomatic pressures come into play. Additionally, enforcement of international price caps on Russian oil has been complicated by the use of ‘shadow’ tankers and vessels owned or insured by countries adhering to the price cap policy, evidencing ongoing circumvention tactics in the transportation of Russian crude.
Alongside Russia, India has strengthened its oil trade relationships with the United States, importing American crude at significant volumes and cost differentials that reflect a calculated strategy rather than reactive procurement. In November 2025, Indian crude imports from Russia averaged $482.7 per tonne, lower than the $523.3 per tonne paid for U.S. crude, highlighting India’s effort to balance cost and supply security. The diversification of oil sources is critical to reducing dependency on any single region, particularly West Asia and Russia, thereby mitigating risks arising from geopolitical disruptions.
Shift in Oil Purchases
India’s position as a major importer of Russian crude oil has undergone notable changes, particularly marked by a recent decline in imports that has shifted India to the status of the third-largest buyer. After sharply increasing Russian crude imports from early 2022 and surpassing traditional Middle Eastern suppliers such as Iraq, Saudi Arabia, and the UAE to become India’s largest crude supplier by 2023, the trend began to moderate amid evolving geopolitical and economic pressures.
In October 2024, India recorded an all-time high monthly import of Russian crude at 10.38 million tons, accounting for approximately 36% of its crude oil imports—up from just 1% in 2017—while imports from Persian Gulf countries declined from 63% to 46%, signaling a strategic pivot toward Russian supply to reduce dependency on Middle Eastern oil. However, this trajectory encountered a turning point towards the end of 2024. Indian imports of Russian crude were expected to fall sharply in December 2024, dropping from 1.84 million barrels per day (bpd) in November to around 1.2 million bpd—the lowest since December 2022.
This decline is attributed primarily to short-term disruptions rather than a fundamental structural change in sourcing patterns. Indian refiners have faced increased geopolitical and financial risks amid tightened U.S. sanctions targeting Russian oil suppliers such as Rosneft and Lukoil, alongside the imposition of secondary tariffs by the U.S. on Indian goods linked to these imports. These sanctions prompted Indian refiners, including state-owned entities Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp, to reassess their Russian oil purchases, often accelerating imports ahead of sanction deadlines to avoid immediate supply shocks.
Despite these pressures, the flow of Russian crude to India has persisted, facilitated through legal channels and intermediaries, with around half of the crude processed at key Indian refineries like Vadinar originating from Russian sources, sometimes transported via “shadow tankers” to circumvent embargoes. The Indian government and energy companies have simultaneously pursued diversification strategies to mitigate risks, expanding procurement from the United States, Latin America, West Africa, and Middle Eastern countries to ensure supply stability and energy security.
This complex interplay of sanctions, diplomatic pressures, and market realities has transformed India’s Russian crude imports from a primarily economic decision to a geopolitical balancing act. Russian crude, which once accounted for nearly 45% of India’s imports at its peak, has seen its share decline amid increased caution by refiners and the shrinking discount on Russian Urals crude, which stabilized at around $6.50 per barrel in late 2024. The narrowing of price discounts and monsoon-related demand fluctuations further contributed to slowing purchases during mid-2024.
In sum, India’s oil purchase shift reflects a nuanced response to external sanctions and internal strategic imperatives. While Russian crude remains a significant component of India’s energy mix, the recent downturn in imports and diversification efforts underscore a recalibration aimed at balancing economic benefits with geopolitical risks.
December Imports Analysis
India’s crude oil imports from Russia in December showed signs of a decline after a period of sustained growth, marking a shift in the country’s oil purchasing patterns. Despite a drop in overall demand for Russian crude in December, imports remained elevated compared to earlier months, with volumes offloaded primarily at the Vadinar port rising to approximately 658,000 barrels per day (bpd), up from 561,000 bpd in November and significantly above the projected 2025 average of 431,000 bpd. This continued importation underscores India’s ongoing appetite for Russian crude, even as the geopolitical landscape complicates procurement.
The reduction in December was largely attributed to decreased buying from Reliance Industries, one of the major Indian importers of Russian crude, which was impacted by tightening U.S. sanctions on key Russian oil producers such as Lukoil and Rosneft. However, India’s broader strategy to diversify its crude oil sources remains intact, as evidenced by steady American crude imports averaging around 439,000 bpd in the same period, highlighting India’s efforts to balance its energy security with geopolitical pressures.
India’s increasing dependence on imported crude oil is evident, with import dependence rising to 87.8% in the fiscal year 2023–24 and domestic production covering less than 13% of demand. Total crude oil imports reached 234.26 million tonnes during this period. The influx of Russian crude has contributed to a notable shift in India’s import composition, with Russian crude’s market share growing from 1% in 2017 to 36% in 2024. Meanwhile, imports from Middle Eastern countries, which traditionally dominated India’s supply, have declined from 63% to 46%. Despite the logistical advantages of Middle Eastern supplies, India’s growing Russian crude imports reflect a pragmatic response to both pricing and geopolitical factors.
The increase in Russian crude imports has provided India with a practical economic buffer, complementing supplies from the United States and other Atlantic Basin sources, allowing India to maintain diversified and flexible procurement routes amid global uncertainties. However, this growing reliance on Russian crude presents diplomatic challenges, as India navigates the balance between shielding its economy from international shocks and managing relations with Western countries imposing sanctions on Russia. Additionally, factors such as the depreciation of the Indian rupee and rising logistics costs from the U.S. may offset some of the financial benefits gained from increased Russian crude purchases.
Position as Third-Largest Buyer
In December 2025, India’s position as a major buyer of Russian fossil fuels notably shifted as the country fell to the third-largest purchaser, overtaken by Turkiye which surged to the second spot among importers. India’s total imports of Russian hydrocarbons were valued at approximately €2.3 billion during this period, with crude oil constituting the majority share at 78%, or about €1.8 billion. Coal and oil products made up the remainder, accounting for €424 million and €82 million respectively.
This decline in imports was largely driven by significant reductions from key Indian refiners, particularly Reliance Industries and state-owned entities, which sharply curtailed their crude oil acquisitions in response to sanctions on Russian companies such as Rosneft and Lukoil. Despite this near-term dip, analysts expect Indian imports of Russian crude to gradually recover in the following months as new intermediaries facilitate supply chain adjustments.
India’s reduced reliance on Russian crude oil reflects both strategic shifts and external pressures. While the country continues to benefit from discounted Russian oil, the reduction in imports is seen as a tactical adjustment that is unlikely to cause significant fiscal strain due to relatively low global prices and diminishing discount margins. Furthermore, Indian refiners are simultaneously strengthening long-term supply agreements with Middle Eastern producers to ensure energy security, maintaining stable imports from these regions despite geopolitical tensions.
This transition occurs against the backdrop of India’s broader energy security goals. As the world’s third-largest oil consumer, India depends on imports for over 85% of its crude requirements, with demand expected to nearly double by 2040 amid rapid economic growth. Diversifying oil sources, including expanding imports from Iraq, UAE, and other countries, is part of India’s strategy to mitigate risks associated with geopolitical disruptions and reliance on any single supplier.
Despite increased scrutiny and warnings from Western countries, particularly the United States, regarding economic consequences for nations importing Russian crude, India has maintained its pragmatic approach. It continues to engage actively in the Russian energy market, leveraging favorable pricing to support its growing energy needs while balancing complex geopolitical considerations between the West and Russia.
Market and Policy Responses
India’s oil imports from Russia experienced a noticeable decline in December, driven primarily by reduced purchases from Reliance Industries, the country’s top importer of Russian crude. This reduction followed the implementation of U.S. sanctions on major Russian suppliers Lukoil and Rosneft in late November. However, state-owned refiners, including Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL), have partly offset this drop by continuing to procure Russian crude through non-sanctioned suppliers, thereby maintaining some volume of imports despite geopolitical pressures.
Analysts highlight that while the narrowing discounts on Russian crude might diminish the economic advantages India previously enjoyed, the country’s ongoing purchases have undercut the effectiveness of Western sanctions. Early in the conflict, Russia’s budget deficit widened but later stabilized as India and China absorbed volumes of crude rejected by European markets. This dynamic has allowed Russia to sustain a significant revenue stream from its oil exports despite sanctions.
In response to the evolving geopolitical landscape and economic pressures, Indian oil companies have been reassessing their trade relationships with Russian counterparts. The government has underscored the importance of energy security and diversification, emphasizing that alternative crude oil sources remain accessible globally. Petroleum and Natural Gas Minister Hardeep Singh Puri has stated that India has adequate supplies and alternatives even if one supply stream is disrupted. Accordingly, Indian refiners have begun diversifying their imports, increasing purchases from Middle Eastern producers such as Iraq and the UAE, and exploring options in Latin America (Brazil, Argentina, Colombia, Guyana) and West Africa (Nigeria, Ghana, Togo, Senegal).
This diversification effort is reflected in Reliance Industries’ strategy, which reduced imports from sanctioned Russian firms by 13 percent in October 2025 while simultaneously increasing crude purchases from Saudi Arabia and Iraq. The combined imports from these countries rose from 26 percent in September 2025 to 40 percent in October 2025, signaling a strategic shift to reduce dependency on sanctioned Russian oil suppliers.
Moreover, certain state-controlled refineries like Mangalore Refinery & Petrochemicals Ltd. and HPCL-Mittal Energy Ltd. announced plans to halt their Russian crude imports, which had accounted for over half of India’s total Russian oil purchases in the first half of 2025. This indicates a cautious approach among Indian refiners to balance geopolitical risks and energy requirements.
Despite these adjustments, India remains among a small group of countries, including China, that continue significant Russian crude purchases. The Indian government has made it clear that decisions regarding energy sourcing prioritize the needs of its 1.4 billion population, suggesting that energy security considerations will outweigh external diplomatic pressures. India’s heavy reliance on imports—over 85% of its crude needs—makes stable supply chains crucial amid rising energy demand projected to nearly double by 2040 alongside anticipated GDP growth.
In light of the complex geopolitical environment, India is also pursuing broader initiatives to enhance energy security. These include investing in overseas upstream oil assets, expanding strategic petroleum reserves, increasing biofuel blending, and promoting alternative automotive powertrains. While these measures partially mitigate dependence on oil imports, India faces the challenge of managing rising petroleum product demand, expected to increase to 7.1 million barrels per day by 2035.
Indian refiners maintain long-term agreements with major Middle Eastern producers to secure energy supplies, while continuing to consider competitive offers from Iraq and others seeking to maintain market share amid the expansion of Russian crude imports. Despite pressure from the U.S. to curtail Russian oil purchases, India has remained resolute in sustaining supply, reflecting a nuanced balance between economic imperatives and geopolitical realities.
Finally, the potential repercussions of sanctions extend beyond crude oil imports. Indian companies engaged with key Russian defense suppliers risk exclusion from the U.S.-controlled dollar-based global financial system, creating further strategic complexities for India’s energy and foreign policy. Consequently, India faces difficult decisions in navigating its present and future energy strategies amid intensifying global sanctions and market shifts.
International Reactions and Impact
India’s sustained importation of Russian crude oil amid Western sanctions has drawn significant international attention and criticism, particularly from the United States and the European Union. The U.S. has imposed stringent secondary sanctions and tariffs targeting
The content is provided by Avery Redwood, 11 Minute Read
