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NEW DELHI – Despite a tightening web of US sanctions and the looming threat of punitive tariffs, India’s demand for Russian crude oil remains structurally intact. New data and analyst projections from energy intelligence firm Kpler suggest that while imports dipped in late 2025, they are poised for a recovery as January progresses.
A Short-Term Dip, Not a Structural Shift
According to Kpler, India’s imports of Russian crude saw a notable decline in December 2025, falling to approximately 1.2 million barrels per day (bpd)—the lowest level in nearly three years. This slump followed fresh US sanctions targeting major Russian producers like Rosneft and Lukoil, which upended traditional delivery schedules and forced refiners to exercise caution.
However, analysts view this as a temporary bottleneck rather than a permanent pivot. Sumit Ritolia, Lead Research Analyst at Kpler, noted that the December dip was a “near-term adjustment” as supply chains reconfigured to bypass sanctioned entities.
“Russian barrels remain economically competitive and well-suited to India’s refining system,” Ritolia stated. “Volumes are expected to recover from January as trade shifts to non-designated intermediaries.”
The Economic Magnet: Deep Discounts
The primary driver behind India’s persistence is the significant price advantage. Russian Urals crude continues to trade at a discount of $8–$10 per barrel compared to Middle Eastern benchmarks like Oman or Dubai crude. For a country that imports nearly 89% of its oil needs, these savings are vital for managing the current account deficit and keeping domestic inflation in check.
The “Sovereign Shield”: State-Owned vs. Private Refiners
While private giant Reliance Industries has reportedly scaled back Russian intake to avoid clashing with US trade interests—denying recent reports of fresh shipments to its Jamnagar complex—state-owned refiners are filling the void.
Companies like Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL) are leveraging what analysts call a “sovereign shield,” continuing to source Russian barrels through non-sanctioned suppliers. Meanwhile, Nayara Energy (partially owned by Rosneft) remains a major conduit, aggressively stockpiling Russian crude to maintain high refinery runs.
Escalating Pressure from Washington
The resilience of these trade flows comes at a high diplomatic cost. The Trump administration has significantly increased pressure on New Delhi:
Tariff Threats: The US has already imposed a 50% tariff on certain Indian exports as a penalty for continued Russian oil purchases.
The 500% Proposal: Bipartisan legislation currently being debated in the US Senate proposes increasing duties to 500% on goods from countries that “knowingly engage” in Russian petroleum trade.
Outlook for 2026
Kpler projects that India will maintain Russian imports between 1.1 million and 1.3 million bpd in January. While the Indian government is reportedly asking refiners for more detailed weekly data to assist in trade negotiations with Washington, there is no official directive to stop buying from Moscow.
Unless the US moves toward broader secondary sanctions that target shipping and insurance lifelines, or the discounts on Russian crude evaporate, India’s energy strategy appears set to prioritize economic pragmatism over Western diplomatic pressure.
