India’s exports of petroleum products declined by 3% in volume terms to 14.5 million tonnes in the first quarter of the financial year 2025-26, compared to 15.0 million tonnes in the same period of FY25, according to data from the Petroleum Planning and Analysis Cell.
Decline in exports
In value terms too, the exports declined by almost 21.8% to $8.6 billion during Q1FY26 compared with $11 billion in the same period a year ago.
Imports of refined oil products increased by 2.5% on-year to 12.4 million tonnes during the quarter. The import bill for these products however declined by 2% to $5.7 billion, PPAC data showed.
Sanctions by EU
Going forward, the latest package of sanctions by the European Union on Russia can severely hurt India’s exports of refined oil products given Europe has emerged as the country’s top destination for supply of such products post the Russia-Ukraine conflict.
As part of a new slew of measures against Russia for its war against Ukraine, the European Union has imposed sanctions on the Indian oil refinery of Russian energy major Rosneft and lowered the oil price cap.
In addition to this, the fresh sanctions include new banking restrictions and ban of Nord Stream pipelines.
In a legal text on sanctions, the EU also said, “Petroleum products imported from third countries which were net exporters of crude oil in the previous calendar year shall be considered to have been obtained from domestic crude oil and not from crude oil originating in Russia, unless a competent authority has reasonable grounds to believe that they have been obtained from Russian crude oil.”
The EU’s move to sanction a Rosneft-linked refinery in India—a key crude-supply hub for IOCL and BPCL—is a strategic jolt for the domestic downstream sector, said Anirudh Garg, Partner and Fund Manager at INVasset.
India imported roughly 1.75 million barrels per day of discounted Russian crude in the first half of 2025, with Russia supplying around 35% of total imports. In June alone, this surged to 2 million bpd—the highest in nearly a year—while Middle Eastern sourcing declined sharply. IOCL and BPCL individually refinanced over one-third of their crude slate from Russia.
“The sanction announcement disrupts this finely calibrated supply chain. Even though the measure targets a single facility, it may trigger ripple effects—restricting access to Russian crude via banking channels, shipping insurance, or logistical bottlenecks. That would undercut the premium discount India’s refiners currently enjoy and strain refining margins. Moreover, IOCL and BPCL could face an incremental cost of swapping Russian volumes for costlier Middle Eastern or US crudes, at a time when global cracks are tightening,” Garg said.
Given the banking, shipping, and regulatory complexities inherent in executing sanctioned barrels, both public refiners may have to hedge via term deals, diversify sourcing, or pass on costs.
The sanctions including restrictions on imports of fuels refined from Russian crude could also impact privately owned Reliance Industries which has become a major importer of Russian oil lately with significant exports to Europe.
India’s export of petroleum products in June declined to 1.19 million barrels per day, down by almost 10% from 1.32 mbd in May, according to data from global real-time data and analytics provider Kpler. On an year-on-year basis too, exports declined by 3.7% from 1.24 million barrels in June 2024.
UAE, Singapore, and Australia emerged as the top destinations for the country’s petroleum products exports in June.
India’s consumption of petroleum products during Q1FY26 remained largely muted at 61.8 million tonnes, same as last year. For FY26, the country has projected its domestic petroleum product demand to reach a record 252.9 million tonnes.
Kpler anticipates a temporary decline in crude processing volumes of around 250,000 barrels per day in the second quarter of 2025, as refiners such as Reliance Industries, Indian Oil Corp, and Mangalore Refinery and Petrochemicals commence planned maintenance.