Four of India’s largest oil refiners have stepped up purchases of discounted Russian crude, even as energy conglomerate Reliance Industries holds back amid tightened US and European sanctions.
State-run Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) have in recent days bought around 10 cargoes of Russian crude not directly covered by US sanctions, including the flagship Urals grade, for delivery in early 2026, according to traders cited by Bloomberg and local media. Hindustan Petroleum Corporation (HPCL) is also seeking January-loading supplies, while private refiner Nayara Energy has continued to process Russian oil despite being blacklisted by the European Union in July.
Taken together, these four refiners account for just over 60 per cent of India’s crude imports this year, based on data from analytics firm Kpler. Their renewed interest in “non-sanctioned” Russian barrels comes after a brief lull in spot purchases ahead of the 21 November deadline for US sanctions on Rosneft and Lukoil, Russia’s two largest oil companies. Before that cut-off, Indian refiners had accelerated purchases, lifting around 1.8–1.9 million barrels per day (bpd) of Russian crude.
By contrast, Reliance Industries – until recently India’s largest buyer of Russian oil – has effectively withdrawn from the market. The company is reported to be avoiding even liftings under its long-term supply agreement with Rosneft, signed in 2024 and covering up to 500,000 bpd, in order to minimise the risk of falling foul of US or EU measures.
Russian exporters have responded to the new sanctions by widening discounts. Recent deals indicate Russia is earning about $40–45 per barrel on some sales to India, with Urals and similar grades priced roughly $5 per barrel below Brent and channelled via new trading firms, often with payments in UAE dirhams or US dollars. That level is among the lowest reported since early 2023 and reflects both sanctions-related disruption and softer demand in India and China.
Even so, overall Indian purchases of Russian crude are falling sharply from earlier highs. At the peak in mid-2025, imports exceeded 2 million bpd, making Russia India’s largest single supplier and accounting for roughly 40 per cent of its crude imports. Reuters now expects Russian flows to India to drop to about 600,000–650,000 bpd in December – the lowest level in three years – as state-owned refiners become “extremely cautious” about touching oil linked to Rosneft or Lukoil.
Nayara Energy, whose Vadinar refinery in Gujarat is 49.13 per cent owned by Rosneft, is an exception. The facility was added to the EU sanctions list in July as “the biggest Rosneft refinery in India” and is effectively barred from exporting refined products to Europe. Despite this, Nayara has continued to rely heavily on Russian feedstock, while other Indian refiners seek to distance themselves from directly sanctioned entities and instead buy from alternative Russian producers or intermediaries.
The US sanctions on Rosneft and Lukoil, imposed by President Donald Trump in October and fully in force since 21 November, are designed to cut into Moscow’s export revenues and have prompted a broader reorganisation of Russian crude flows. Analysts estimate a temporary disruption of 1.2–1.4 million bpd as traders and refiners adjust contracts, shipping routes and payment structures. At the same time, the EU and G7 are debating whether to replace the existing price-cap regime with a full ban on maritime services for Russian oil, a step that would further complicate Indian and Chinese access to Russian barrels carried on Western-linked tankers.
Washington argues that India’s purchases, even at reduced volumes, help finance Russia’s war against Ukraine. In response to continued imports of Russian crude, the Trump administration has imposed additional tariffs that have doubled overall duties on Indian goods entering the US to around 50 per cent, including a 25 per cent surcharge explicitly linked to energy trade with Moscow. A long-discussed bilateral trade agreement between New Delhi and Washington remains unresolved.
India, the world’s third-largest oil importer, has defended its buying strategy as a matter of national energy security and has sought to demonstrate what it calls “strategic autonomy” in foreign policy. Prime Minister Narendra Modi hosted Vladimir Putin in New Delhi last week, with the Russian president promising “uninterrupted” oil supplies to India in defiance of US pressure. The Kremlin has stated that India will continue purchasing Russian crude as long as it remains economically attractive.
For now, India’s approach appears to be to narrow but not sever its energy links with Russia: reducing volumes, avoiding dealings with sanctioned entities where possible, and using intermediaries and alternative payment routes to keep discounted barrels flowing. Whether that adjustment will be sufficient for the Trump administration is unclear. US officials continue to criticise India’s Russian oil trade, and further measures – including tighter maritime restrictions or broader secondary sanctions – remain under discussion in Western capitals.
The trajectory of India–Russia oil trade in 2026 will depend on how far those measures go, how quickly Russia can reroute exports through non-sanctioned channels, and how India weighs the benefits of cheap crude against the economic cost of US tariffs and the political value of closer ties with Washington.
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