For over two years, India has been Moscow’s lifeline in the global oil market, scooping up discounted Russian crude that Western nations shunned. But the tables are turning, and quite dramatically. A fresh wave of U.S. sanctions is now compelling Indian refiners to rethink their energy strategy, signalling a “massive cut” in Russian oil imports.
This isn’t mere speculation. The U.S. recently imposed sanctions on Russia’s two largest oil producers, Rosneft PJSC and Lukoil PJSC, giving global buyers until November 21, 2025, to wind down their dealings. This move directly targets entities pivotal to India’s energy imports, which have soared since the 2022 Ukraine invasion.
The Story So Far: India’s Russian Oil Addiction
Since 2022, India emerged as the largest buyer of Russian seaborne oil, importing an average of 1.7 million barrels per day (bpd) during the first nine months of 2025. This surge was driven by attractive discounts, which initially peaked at $19-20 per barrel in 2023, though they have since narrowed to $3.5-5 per barrel. Russian crude’s share in India’s total oil imports skyrocketed from a mere 1.7% in FY20 to approximately 40% in FY24, making Russia India’s primary oil supplier.
Caught in the Crosshairs: Major Indian Players Respond
The impact is palpable across India’s refining landscape. The privately-owned Mukesh Ambani’s Reliance Industries, India’s single largest buyer of Russian crude, is reportedly planning to significantly reduce or even completely halt its Russian oil imports. This includes reviewing its long-term deal with Rosneft, which accounted for nearly 500,000 bpd. A Reliance spokesperson confirmed that “Recalibration of Russian oil imports is ongoing and Reliance will be fully aligned to GOI (Government of India) guidelines.”
State-owned refining giants, including Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp, and Mangalore Refinery and Petrochemicals, are also scrambling to ensure compliance. They are meticulously reviewing trade documents and bills of lading to ensure no direct supplies originate from the sanctioned Russian entities after the November 21 deadline. While these state refiners typically procure Russian oil through intermediaries, the enhanced scrutiny aims to avoid any inadvertent violations that could trigger secondary sanctions.
Another private player, Nayara Energy, in which Rosneft holds a 49.13% stake, is also expected to curtail its Russian oil purchases.
The Bigger Picture: Geopolitics, Tariffs, and Rising Oil Prices
This recalibration is not just about compliance; it’s intricately linked to broader geopolitical pressures. The U.S. has been pushing India to reduce its reliance on Russian energy, with President Donald Trump repeatedly claiming, despite denials from New Delhi, that Prime Minister Narendra Modi had assured him of such cuts. More concretely, India currently faces punishing 50% tariffs on its exports to the U.S., with half of these duties imposed in retaliation for continued Russian oil purchases.
The market has already reacted. Following the news of India’s potential shift, global oil prices surged by nearly 3% on Thursday. Brent crude futures rose by $1.94, or 3.1%, to $64.53 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by $1.89, or 3.2%, to $60.39 per barrel. Analysts believe this jump is fueled by fears that tighter sanctions and reduced Russian exports could disrupt global supply chains, pushing refiners to seek alternative, potentially costlier, sources from the Middle East and Africa.
What Lies Ahead?
While an immediate halt to all Russian oil imports is unlikely, a significant reduction is on the horizon. Indian refiners will now have to swiftly secure alternative crude sources to maintain refinery operations, balancing volumes and technical compatibility. The shifting energy landscape underscores the delicate tightrope India walks between securing affordable energy for its vast population and navigating complex international relations.
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