Indian oil refiners have significantly increased their procurement of Russian crude oil, acquiring millions of barrels of prompt cargoes as the country grapples with tightening oil supplies caused by ongoing conflicts in the Middle East. This strategic move comes amid a complex geopolitical landscape where India is striving to maintain steady energy supplies while navigating international pressures and regional instability.
For several months, the United States has exerted considerable diplomatic pressure on New Delhi to curtail its purchases of Russian oil. Washington’s objective has been to limit financial resources flowing to Moscow, which are believed to support Russia’s military operations in Ukraine. Despite these efforts, India’s urgent need to secure reliable energy sources has compelled its refiners to reconsider their stance, especially as the Middle East conflict threatens to disrupt the flow of crude oil through critical maritime routes.
India’s vulnerability to energy supply shocks is underscored by its relatively low crude oil stockpiles, which currently cover only about 25 days of domestic demand. This limited buffer heightens the country’s exposure to any interruptions in oil imports. Approximately 40 percent of India’s oil imports transit through the Strait of Hormuz, a strategic chokepoint in the Persian Gulf that has become increasingly volatile due to regional tensions. The potential for supply disruptions in this corridor has prompted Indian refiners to diversify their sources to ensure uninterrupted fuel availability.
Historically, India emerged as the largest buyer of Russian seaborne crude following Moscow’s invasion of Ukraine in early 2022. However, by January of this year, Indian refiners began scaling back their purchases under mounting pressure from the United States. This reduction helped India avoid punitive 25 percent tariffs on Russian oil and facilitated the signing of a temporary trade agreement with Washington. Yet, with the recent escalation of conflict in the Middle East, India appears to be recalibrating its approach, possibly increasing Russian oil imports once again to compensate for anticipated supply shortfalls from the region.
It remains unclear whether the U.S. government has formally granted India permission to expand its purchases of Russian crude in light of the current Middle Eastern crisis. Notably, India reportedly sought approval from the previous U.S. administration during President Donald Trump’s tenure to import Russian oil amid earlier geopolitical tensions. This historical context highlights the ongoing balancing act New Delhi faces between maintaining strategic energy partnerships and managing diplomatic relations with Washington.
Major Indian state-owned refiners, including Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Mangalore Refinery and Petrochemicals Limited, are actively engaging with international traders to secure prompt deliveries of Russian crude. Industry insiders reveal that these refiners have collectively purchased approximately 20 million barrels of Russian oil in recent transactions. While Hindustan Petroleum and Mangalore Refinery last received Russian shipments in November, current deals indicate a renewed interest in Russian crude supplies.
Interestingly, the pricing dynamics for Russian Urals crude destined for India have shifted notably. Traders report that the oil is now being sold at a premium of $4 to $5 per barrel above Brent crude for deliveries scheduled in March and early April. This contrasts sharply with the substantial discounts of around $13 per barrel observed in February. Prior to the outbreak of war on February 28, Hindustan Petroleum had acquired two cargoes of Russian oil at these discounted rates, reflecting the volatile nature of the market.
One trader involved in Russian oil sales to India remarked that the current challenge for Indian refiners is less about price and more about the availability of cargoes. This sentiment underscores the tight global supply situation and the scramble among buyers to secure prompt shipments. Furthermore, Reliance Industries, one of India’s largest private sector refiners, has also reportedly approached traders to purchase Russian crude, signaling a broader industry trend toward tapping into Russian oil supplies.
In addition to formal imports, Indian refiners have begun sourcing Russian crude from vessels anchored off the country’s coastline. This approach helps mitigate the loss of Middle Eastern crude by utilizing floating storage and prompt offloading strategies. Such measures indicate the lengths to which Indian refiners are going to maintain fuel supplies amid uncertain global energy markets.
Despite multiple inquiries, Indian refiners have not provided immediate responses to requests for comments, and official statements from India’s oil and foreign ministries remain unavailable. Similarly, the White House and the U.S. Treasury Department have yet to issue any remarks on the evolving situation. As the geopolitical landscape continues to shift, India’s balancing act between securing energy security and managing international diplomatic pressures remains a critical story to watch.
