India’s crude import bill declined by 18.6% during the first three months of financial year 2025-26, reaching $30.6 billion compared to $37.6 billion in the same period of FY24, according to data from the Petroleum Planning and Analysis Cell. The decline in the import bill can be attributed to India’s heavy reliance on discounted Russian barrels.
The country imported 62.1 million tonnes of crude oil during Apr-Jun, largely unchanged from last year.
India, which meets 85% of its crude oil requirements via imports, has ramped purchases of Russian crude since the Eurasian country’s war with neighbouring Ukraine broke out in early 2022. The discounted Russian oil helped the country control the forex outgo for the key energy source.
Russian crude fuels India’s refining margins
The sharp pivot toward Russia is not just opportunistic, but structural. Indian refiners re-optimized their crude diet to incorporate higher volumes of Urals and ESPO, aided by blending strategies, flexible CDU (Crude Distillation Unit) configurations, and crude assay recalibration, said Sumit Ritolia, lead research analyst, refining & modeling at Kpler. This reflects a shift from traditional Middle Eastern dependence toward a more Atlantic-Pacific diversified mix.
In 2020-2021, Russia accounted for only ~2–3% of India’s crude imports. Post-war, its share skyrocketed to ~16% in 2022, and further to ~38% in 2023–2024, overtaking all traditional suppliers. This shift reflects India’s opportunistic procurement of deeply discounted Urals crude amid Western sanctions on Russia.
Once the top or second-largest supplier, Saudi Arabia’s share declined from 18% in 2020 to 13.6% in 2024. Competitive pricing from Russia and diversification of India’s crude basket likely contributed to the erosion, Ritolia said.
India’s reliance on crude oil imports increased to 81.3% during the period, up from 80.2% in the same period of last year, amid rising demand.
During the month of June, the country imported 19.8 million tonnes of crude oil, up from 18.8 million tonnes. In value terms, the crude oil import bill declined 13% last month to $9.7 billion.
Geopolitical risks loom as US eyes secondary sanctions
The US recently said it could impose 100% tariffs on Russia and “secondary tariffs” on countries importing its oil – mainly India and China – if Russia didn’t agree to a deal to end the Ukraine war in 50 days.
Unfazed by NATO secretary general Mark Rutte’s blunt warning of “100% secondary sanctions,” the government on Thursday indicated it felt “no pressure” as far as purchase of oil from Russia or any other country of its choice was concerned. “We will buy from wherever we have to because the prime minister’s commitment is to the Indian consumer,” oil minister Hardeep Singh Puri said, without explicitly referring to Russia.
Analysts, however, warn that the US’s proposed secondary tariff on countries buying Russian oil could severely disrupt Indian supplies while also resulting in an increase in the country’s oil import bill, as the country will lose its access to discounted barrels.
Today, Russia continues to serve as a strategic cornerstone in India’s crude oil sourcing strategy. The increase in Russian crude intake directly correlates with maximizing gross refining margins (GRMs), particularly for PSU refineries that benefited from cheap Urals, converting them into high-yield diesel during strong crack spreads, Ritolia explained.
Several refineries continue processing Russian grades at high throughput, prioritizing commercial advantage over operational cycles. The replacement of traditional Arab Heavy and Kuwaiti blends with Russian Urals has resulted in a heavier and sourer overall crude slate for India since 2022. “This altered product yields (e.g., higher VGO output), prompting operational tweaks in FCC and hydrocracker units to maintain product output balances,” Ritolia said.
Looking ahead, Kpler estimates Russia to remain India’s largest crude supplier (35-40%), supported by price competitiveness and techno-economics. However, this dominance could face pressure if the West escalates enforcement of secondary sanctions targeting financial or shipping facilitators.
“Such a scenario could either reduce Russian volumes or push Indian refiners to seek greater compliance safeguards and increase diversification, or force Indian refiners to move towards the Middle East, Latam or even Waf and Canadian barrels,” said Ritolia.
Meanwhile, imports from the Middle East are expected to stabilize in the 35–40% range, with Iraq, Saudi Arabia, and the UAE continuing to play key roles. India is also expected to sustain its diversification efforts, tapping additional volumes from Africa, Latin America, and the United States to optimize refinery economics, balance geopolitical exposure, and enhance energy security.