Russia is now buying back petrol from India even as it supplies 2.5-2.6 million barrels per day (bpd) of crude to Indian refiners, turning the oil trade full circle. According to Vortexa data, 1.66 million barrels of gasoline moved to Russia in June-July, marking a rare reversal in an oil trade built largely around Russian barrels flowing into Indian refineries.
Yet the new dependence has yielded no pricing advantage for Indian refiners, with recent Urals purchases moving to around a $1-a-barrel premium to Brent, rather than wider discounts.
The shipments of gasoline to Russia come as Ukrainian attacks disrupt Russian refining operations and tighten domestic supply. Russia was not a direct destination for Indian gasoline in August, but still supplied about 2.08 million barrels per day (bpd) of crude, or around 45% of India’s total imports.
Vortexa data show India’s direct gasoline exports to Russia averaged 17,146 bpd in June and 37,255 bpd in July, equivalent to about 0.51 million barrels and 1.15 million barrels, respectively.
In August, Vadinar refinery alone shipped 1.7 million barrels of clean products to Mersin, from where some cargoes may have moved onward.
But a similar Russia-bound diesel trade appears unlikely. According to Natalia Katona, an independent commodity analyst based in Abu Dhabi, Russia has historically not imported diesel by sea and currently faces no comparable shortage. Its greater vulnerability is gasoline, where the country has historically maintained only a 100,000-150,000 bpd surplus.
India’s Russian crude imports, meanwhile, fell 26.3% in August from 2.82 million bpd in July, although Moscow remained the country’s dominant crude supplier.
The clearest trackable example of the circular trade is Nayara Energy’s Vadinar refinery. Katona said three cargoes from Vadinar totalling 1 million barrels have reached Russia’s White Sea. Nayara is 49% owned by Rosneft and Vadinar is operating entirely on Russian crude.
“Tracing the full trade cycle is difficult because Indian refiners rarely acknowledge supplying fuel to Russia,” Katona said.
The physical trail could extend beyond direct India-Russia shipments. Katona said another eight cargoes had unclear provenance, including four totalling 800,000 barrels departing Tangier and four totalling another 800,000 barrels from Mersin.
Neither location has a nearby operating refinery, while both receive Indian clean products. The 1.7 million barrels shipped from Vadinar to Mersin in August make an Indian origin plausible for some onward cargoes, particularly those moving from Turkey, though shipping data do not conclusively establish the link.
Russia shortage changes petrol economics
PPAC data illustrate the broader pricing environment behind the trade. The Indian crude basket averaged $83.22 a barrel in June, $82.04 in July and $90.19 in August, while international FOB petrol averaged $107.78 a barrel in June and $95.22 in July. The headline petrol-crude spread was, therefore, about $24.56 a barrel in June and $13.18 in July.
That spread, however, cannot be treated as refinery profit. Actual returns depend on the crude purchase price, refinery yields and processing costs, freight into India, product freight to Russia, insurance, transshipment and demurrage.
“This is extremely difficult to calculate reliably on a per-barrel basis,” Katona said. Cargo size, vessel class, loading and discharge ports, routing, confidential pricing terms and who bears the freight can materially change the economics.
The key change has been the physical availability of petrol inside Russia. Refinery outages have raised the marginal replacement price enough to make imported gasoline at around 105,000 rouble a tonne, or $1,220 a tonne, competitive.
Katona said Russian support for imported gasoline is about 3.5 times the domestic damper mechanism. Without the support, Indian-market petrol prices plus freight, war-risk insurance, transshipment and port charges would not allow imported fuel to compete commercially with lower Russian domestic petrol prices.
No crude-price payoff for India
Russia’s need for imported gasoline has so far failed to strengthen India’s hand in crude negotiations. Katona estimates Indian petrol flows to Russia are well below 1% of Russian crude deliveries to India on a daily-barrel basis, leaving the reverse trade too small to reset the broader pricing relationship.
Instead of widening, Urals discounts have tightened. Most recent purchases by Indian refiners have been concluded at around a $1-a-barrel premium to Brent, Katona said.
Nayara’s position also limits its bargaining leverage. Rosneft’s 49% ownership and the refinery’s dependence on Russian crude make Vadinar strategically important to Moscow, but reduce its ability to credibly threaten switching to alternative suppliers.
India has substantially larger diesel export volumes. Kpler data shared with FE show diesel exports averaged 336,400 bpd in June, 547,021 bpd in July and 528,191 bpd in August. India’s overall gasoline exports stood at about 269,372 bpd in August.
The emerging loop has, therefore, made Indian refiners a temporary balancing point for Russia’s petrol market, but the mismatch in scale remains stark: Moscow continues to supply India with millions of barrels of crude every day, while the fuel flowing back remains too small to translate into cheaper Urals for Indian refiners.