Despite the government’s assertion that India’s oil imports from Russia won’t be cut in the face of tariff threats from the US, Urals flows to the country could moderate in the coming weeks. Indian refiners are assessing alternative supplies and procurement costs in an already tight oil market, and any punitive tariffs linked to Russian oil imports could accentuate the trend.
“Energy security is the key,” a top government official said, reiterating that tariff measures alone were unlikely to determine India’s crude sourcing decisions. Refiners are in a wait-and-watch mode on how the US measures are implemented after the 30-day window expires, the official added.
US President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 on September 18, giving Washington the power to impose tariffs on Russia’s major trading partners.
India is already paying significantly more for crude. The Indian crude oil basket stood at $120.8 per barrel on September 28, while the September average was $116.01 per barrel.
“We would expect the Indian oil industry to exercise caution as soon as any US unilateral punitive measures toward India are announced. The Indian government and market players will likely assess the global market situation, the US’s actual efforts to enforce those measures, and options to obtain waivers or challenge them,” said Sumit Ritolia, Senior Manager (Modelling), Kpler.
Russian barrels are no longer available at the steep discounts seen earlier. Urals has been trading at around an $8-per-barrel premium to ICE Brent, although it remains competitive against some alternative barrels once freight and delivered costs are factored in.
India imports about 90% of its crude requirement. Russia currently accounts for roughly 35% of imports, making a large near-term replacement difficult. During April-July, Russian supplies constituted around 44% of imports, valued at $28.32 billion, 75% higher than $16.18 billion a year earlier.
Kpler estimates India’s overall crude imports at around 5.3 million barrels per day (mbd) in September, up roughly 600,000 bpd month-on-month and 700,000 bpd year-on-year, as refinery maintenance eases and crude runs remain strong.
Russian arrivals, however, have eased to around 1.75 mbd, the lowest since April, compared with about 2.1 mbd in August.
“During that assessment period, we could expect to see a decline in volumes, but not a halt, of Russian crude going into India,” Ritolia said, adding that economics, availability and refinery compatibility would continue to determine purchases.
The biggest offset has come from the Middle East, with Indian imports rising to around 3 mbd in September, broadly returning to pre-war levels, supported by higher flows from Iraq, Kuwait and Saudi Arabia and improving movements through the Strait of Hormuz.
African and Venezuelan barrels are also contributing to diversification. However, tighter Russian availability has already pushed refiners towards costlier alternatives such as UAE’s Murban, Iraqi Basrah and Angolan crude.
India’s sensitivity to crude prices remains high. Bank of Baroda estimates that a persistent $1-per-barrel increase can raise the annual oil import bill by around Rs 18,000 crore.