India–Russia Oil Trade Likely to See Another Decline
Indian refiners diversify oil sourcing as geopolitical pressure, tariffs and sanctions uncertainty weigh on discounted Russian supplies
India, Jan 15 : India’s purchases of Russian crude oil are expected to stabilise or slip further this month, potentially leaving more unsold cargoes stranded at sea and forcing the country to turn to costlier alternatives from other regions. The likely dip follows a sharp fall in December, when imports dropped to a three year low, nearly one-third below their peak levels recorded in June.
Ship-tracking data and industry sources indicate that January buying has remained under pressure. The decline comes amid sustained criticism from the United States, which has accused India of supporting Russia’s war in Ukraine through oil purchases. The Trump administration has already imposed steep 50 per cent tariffs, while trade talks have failed to yield a breakthrough. Washington is also considering new sanctions that could penalise countries importing Russian hydrocarbons.
These developments have pushed India’s refining sector the world’s fourth-largest by capacity to reduce its dependence on discounted Russian crude. As a result, tankers carrying Russian oil are increasingly idling at sea without confirmed buyers.
“Russia remains a key part of India’s crude basket for now,” said Sumit Ritolia, lead analyst for refining and modelling at Kpler Ltd. “But procurement is becoming more opportunistic, diversified and compliance-driven as geopolitical risks rise.”
According to data from Vortexa and Kpler, India imported around 1.3 million barrels per day of Russian crude in December. Analysts estimate January volumes could hover between 1.2 million and 1.4 million barrels per day, though final figures may fall below that range.
To offset the reduced intake from Russia, Indian refiners are stepping up purchases from the Middle East, West Africa and Latin America, despite higher costs. Imports from Saudi Arabia have risen this month, while Indian Oil Corporation has made a rare purchase of Ecuadorian Oriente crude for late March delivery. The company has also floated tenders for sour crude grades similar in quality to Russia’s Urals blend.
However, refiners remain cautious about Venezuelan crude until there is greater clarity on sanctions compliance. Indian Oil did not respond to requests for comment.
India’s Ministry of External Affairs said the country’s energy procurement strategy depends on global market dynamics and the need to ensure affordable energy for its population of 1.4 billion. “This will shape how India engages with the global energy market,” MEA spokesperson Randhir Jaiswal said.
With Russia’s largest oil producers under sanctions, the destination of unsold Urals cargoes remains uncertain. Few countries outside China appear willing to openly defy US-led restrictions, even though the grade is trading at a discount of about $8 per barrel to Brent, making it among the cheapest options for refiners prepared to take the risk.
