India’s Russian oil imports fall 26% in a month: What is behind the drop?

Provisional tanker data shows India’s oil imports from Russia fell 26% in August from July’s record highs. The drop comes as US tariff pressure, Ukrainian drone strikes and growing competition from China affect Russian oil supplies.

The big question now is whether August was just a temporary dip or the beginning of a tougher period for India in securing Russian crude.

The numbers behind the fall

According to vessel-tracking data from commodity market analytics firm Kpler, India imported 2.08 million barrels per day (bpd) of Russian oil in August, down 26.3% from July’s record of 2.82 million bpd.

India’s total oil imports also fell 8.4% to 4.62 million bpd from 5.04 million bpd in July, Kpler’s data showed. Russia’s share of India’s crude basket dropped to 45% in August from 55.9% the previous month.

Kpler’s view, based on the data, is that this may be market normalisation rather than a major change away from Russian crude. Flows are expected to settle between 2 million and 2.5 million bpd, which would still make Russia India’s biggest source of crude.

Still, the August fall comes after a remarkable rise in Russian oil imports. Trade data cited by Reuters showed that Russian oil made up a record 50.83% of India’s total crude imports in July, at 2.47 million bpd. That was 62.4% higher than a year earlier.

The longer-term rise has been even more dramatic. According to India’s official trade data, Russian crude imports were worth just $5.25 billion in 2021-22. They jumped to $38.81 billion the following year after Western sanctions pushed discounted Russian barrels towards India.

Why Russia has less oil to sell

The main reason for the August drop is that Russia has less crude available for export, and moving the oil has become more difficult and expensive.

Abu Dhabi-based energy analyst Natalia Katona, writing for oilprice.com, “Russia is exporting less crude both to India and overall, just as China is competing more aggressively for available cargoes. The question for the coming months is therefore whether August represents a temporary retreat or the start of a period in which Russian barrels become scarcer, costlier and harder for Indian refiners to secure.”

Total seaborne Russian crude exports fell to 3.7 million bpd in August from 4.1 million bpd in July, according to Katona’s analysis. The biggest fall came at the Black Sea port of Novorossiysk, India’s second-largest source of Russian crude since April 2026. Shipments from the port dropped to 616,000 bpd from 800,000 bpd.

Ukrainian drone attacks in the Black Sea have also made the region more dangerous for tankers. The risk affects not only Russian vessels but also ships operated by US companies and the Caspian Pipeline Consortium. Its terminal has been hit several times and even suspended loadings for weeks, according to Katona’s reporting.

Freight costs are also making the Black Sea route less attractive. Moving a Suezmax tanker from Novorossiysk to India’s west coast now costs about $20 million, or roughly $20 a barrel. That compares with about $13 a barrel from Baltic Sea ports, Katona noted.

However, Baltic routes also carry risks. Russian tankers sailing around Europe could face detention or seizure by European authorities. This has pushed more traffic towards the Northern Sea Route, where movement peaks in August and September when Arctic ice is thinner.

Russia is also keeping more crude for its own refineries. Ukrainian drone strikes have damaged Russian refining capacity and caused domestic fuel shortages. Moscow has been forced to restrict exports of petrol and diesel and keep more crude for domestic plants while trying to maintain supplies to its two biggest Asian buyers, according to Katona’s analysis and separate Reuters reporting.

China is bidding harder for the same barrels

Russia’s supply problems are only one part of the story. China is also buying more crude and competing more strongly for Russian barrels. Beijing’s crude purchases rose to 7.4 million bpd in August from 6.9 million bpd in July. Its Russian imports climbed to 1.7 million bpd from 1.4 million bpd, according to Katona’s analysis. This means more Urals cargoes are heading to Chinese ports instead of Indian ones.

Two other factors are adding to the competition. Chinese refiners have been using floating storage of Iranian crude near their coast and in Singapore. These stocks had allowed them to buy less aggressively in recent months. With the US Navy effectively blocking Iran’s tanker fleet at the Strait of Hormuz, those inventories are unlikely to be replenished soon. That could push Chinese buyers to rely even more on Russian barrels. Combined with Russia’s push to increase domestic refining, this means fewer discounted Russian cargoes may be available for Indian refiners.

The US pressure campaign that hangs over every barrel

India’s Russian oil trade has also been shaped by pressure from Washington. Since Russia’s invasion of Ukraine, US administrations have sent mixed signals to India. At first, Washington encouraged New Delhi to buy Russian oil to help keep global prices under control. Later, it began pressuring India to reduce those purchases.

In 2022, under former president Joe Biden, the US actively urged India to purchase Russian crude to help stabilise global energy markets. This came as India’s Russian oil imports rose nearly seven-fold in a single year, according to India’s official trade data.

The US position has since changed a lot. President Donald Trump and members of his administration have repeatedly claimed that India would reduce its Russian oil purchases in exchange for Washington lowering tariffs on Indian exports.

India has maintained that its energy purchases are guided by market conditions. The tariff threat has already had commercial consequences.

Reliance Industries halted its Venezuelan crude imports in the summer of 2025 after Washington threatened higher tariffs on countries buying Venezuelan oil. This happened even though Reliance had earlier received a US sanctions waiver to resume those purchases.

A handful of Indian companies have also faced Western secondary sanctions for continued trade with Moscow. Among them was Lokesh Machine Tools, which was sanctioned in 2024 and removed from the list only in June 2026.

Even as this pressure continued, the US granted a temporary waiver on Russian oil purchases after the West Asia war pushed Brent crude above $100 a barrel in February.

The waiver expired on 17 June. During that period, Indian refiners bought even larger volumes of Russian crude, according to reporting on India’s trade data for the quarter.

Diversification is real, but uneven

As Russian supplies become harder to secure, Indian refiners are looking at other sources of crude. The UAE strengthened its position as India’s second-largest crude supplier in August. Shipments rose to 520,000 bpd from 470,000 bpd. Saudi Arabian flows, however, fell to 350,000 bpd from 415,000 bpd.

The fall came after the Bab el-Mandeb Strait closure in late July redirected Suez-bound cargoes towards Europe. Gulf shipments have also been affected by the need to route through Hormuz and rely on ship-to-ship transfers near Fujairah, according to Katona’s analysis.

Iraq and Kuwait are also slowly returning to India’s import mix after nearly disappearing during the West Asia crisis. Iraq once supplied India with close to 1 million bpd. Its flows fell sharply before recovering to 165,000 bpd in August. Kuwait returned with 90,000 bpd after recording no supplies between March and July.

Venezuela has been the biggest gainer

Kpler data showed India’s imports from Caracas jumped 60.2% month-on-month to 350,000 bpd in August. This was the highest monthly level since 2020.

The rise followed Washington’s capture of Venezuela’s then-president Nicolás Maduro in early January and Trump’s later statement that the US would take control of the country’s oil sector. Select commodity traders were then authorised to sell Venezuelan crude globally.

India, and Reliance in particular, had been a major buyer of Venezuelan oil before 2019 sanctions ended much of that trade. According to India’s official trade data, Venezuela was India’s fifth-largest oil supplier that year, sending close to 117 million barrels of crude to Indian refiners.

Refinery maintenance is being postponed, not planned. Another factor behind August’s numbers is the usual refinery maintenance season that largely did not happen. Strong margins on refined products have encouraged most Indian refiners to postpone their monsoon-season shutdowns rather than reduce crude purchases.

What comes next

Russia’s own outlook makes the situation more complicated. A Russian government draft forecast seen by Reuters projects Russian crude production falling to 494.2 million tonnes in 2026, its lowest level since 2009.

At the same time, crude exports are expected to rise to 244.7 million tonnes from 230.8 million tonnes in 2025, Reuters reported. The apparent contradiction is linked to Russia processing less crude at home after drone strikes damaged its refineries. That leaves more crude, rather than refined fuel, available for export.

Much of this additional crude is expected to go to India and China. However, Russia’s own projections show exports falling again after 2026, to 232.5 million tonnes in 2027 and 216.6 million tonnes by 2028-29. This could mean even stronger competition between Indian and Chinese buyers in the coming years.

Russian crude is also now trading close to parity with dated Brent, reducing much of the discount that made it attractive in the first place. At the same time, Middle Eastern supply routes remain affected by risks around major shipping chokepoints. Indian refiners are therefore heading into autumn with fewer cheap options than they have had in years.

Disclaimer: Commodity market analytics, crude import data, and international trade projections are compiled for informational purposes only and do not constitute financial advice or commodity trading recommendations.