India’s Major Refiners To Slash Russian Oil Imports As US Sanctions Bite
India is set to dramatically cut direct Russian crude oil imports starting late November, with major refiners complying with new US sanctions targeting Rosneft and Lukoil effective November 21.
Key Takeaways
- Reliance Industries and two state-owned refiners to halt Russian crude purchases
- Russian oil imports expected to drop sharply in December 2024
- India diversifying to US, Middle East, Latin American crude sources
- Gradual recovery expected by early 2026 through intermediaries
Analysts confirm that Indian refiners, responsible for over half of the country’s Russian crude processing, will largely adhere to the new restrictions despite Russia being India’s top supplier until October.
Major Refiners Exit Russian Market
Reliance Industries Ltd, which maintains long-term contracts with Rosneft, plans to stop Russian crude purchases. They’re joined by state-owned Mangalore Refinery and Petrochemicals Ltd and HPCL-Mittal Energy Ltd in halting imports.
Collectively, these three companies handled more than half of India’s 1.8 million barrels per day of Russian crude imports during the first half of 2025.
However, Nayara Energy’s Vadinar refinery, partially owned by Rosneft and already under EU sanctions, will continue Russian crude sourcing.
Supply Diversification Accelerates
Kpler’s Lead Research Analyst Sumit Ritolia stated: “Most Indian refiners are expected to comply with US sanctions and halt or reduce direct crude purchases from Rosneft and Lukoil.”
While Russian oil will remain in India’s import mix, future deliveries will involve complex logistics and trading arrangements through intermediaries.
To compensate for reduced Russian supply, Indian refiners are increasing purchases from multiple regions:
- Middle East (Iraq, Saudi Arabia)
- United States
- Latin America
- West Africa
- Canada
US crude imports hit 568,000 barrels per day in October – the highest since March 2021 – though analysts attribute this to market economics rather than sanctions. These flows are expected to normalize to 250,000-350,000 barrels daily by December-January.
Long-term Outlook and Challenges
Ritolia projected: “We expect a sharp decline in Russian crude imports in December, followed by a gradual recovery through mid-to-late Q1 2026, as new intermediaries emerge and alternative routes are established. Higher freight costs could limit the scale of substitution by eroding arbitrage opportunities.”
This strategic shift represents India’s balancing act between international sanction compliance and domestic fuel supply security. The country is maintaining controlled Russian oil imports via intermediaries while aggressively diversifying its crude sourcing portfolio across global markets.
