India’s state-owned refiners significantly scaled back their Russian oil purchases, cutting imports by over 45% from June to September this year. Data from maritime analytics firm Kpler reveals that state-owned refineries received 600,000 barrels per day (kb/d) of Russian oil in September, a substantial decrease from the 1.1 million kb/d recorded in June.
This reduction in Russian oil imports unfolds against a tense geopolitical backdrop, particularly after U.S. President Donald Trump imposed a 50% tariff on Indian imports in August, which included a 25% penalty specifically for purchasing Russian oil. Washington has been vocal in its insistence that New Delhi cease crude purchases from Moscow as a prerequisite for more favorable trade negotiations.
Despite these external pressures, India has consistently reaffirmed its commitment to safeguarding its domestic energy security. The nation has been strategically acquiring Russian oil at a discounted rate, a direct consequence of the sanctions imposed on Moscow following its actions in Ukraine.
Interestingly, while state-run Indian refiners have curtailed their Russian oil intake, private sector players like Reliance Industries and Russia’s Rosneft-backed Nayara Energy have moved in the opposite direction, increasing their imports. According to Kpler’s figures, Reliance Industries now imports an impressive 850 kb/d of Russian oil, more than double its January volume of 420 kb/d. Nayara Energy also saw a notable increase, importing nearly 400 kb/d in October, marking its highest volume for the year.
Russian Exports Up, But Not Fully Reaching India
According to Kpler’s Senior Crude Oil Analyst, Naveen Das, Russia’s overall crude oil exports increased in both August and September. However, this rise hasn’t fully translated into a proportionate surge in arrivals to India. India’s total imports from Russia have remained largely consistent since July, hovering around 1.63 million b/d, after peaking at over 2 million b/d in June. Kpler forecasts a slight dip for October, estimating imports at 1.56 million b/d.
The Shrinking Discount on Russian Crude
Mr. Das also noted a ‘narrowing’ discount on Russian crude, particularly the Urals grade, which constitutes the majority of India’s Russian oil imports. When the secondary round of U.S. tariffs was introduced in August, the landing price for a barrel on India’s West Coast included an approximate $6 discount compared to the Dubai benchmark. Currently, this discount has dwindled to ‘nearer to $0.80/barrel.’ He explained that this change is due to the market’s realization that India is a more aggressive buyer of Russian crude than previously thought, coupled with rising global freight costs eroding the discount on a landed basis.
Beyond Russia’s specific geopolitical standing, the broader oil markets were anticipated to stabilize following the agreement by OPEC+ nations, including Russia, to boost production by 137 kb/d starting in November.
This increase was expected to lead to a greater flow of oil globally and potentially softer prices, especially for Middle Eastern crude. The Kpler analyst has observed a rise in Iraqi crude imports to India, alongside consistent volumes from Saudi Arabia. However, he pointed out that some OPEC+ countries are aware of the challenges with Russian supply, and are therefore ‘keeping prices slightly higher to Asian buyers (knowing they might look for alternatives). ‘
Despite this, he added, ‘But looking ahead, with more oil available globally in the fourth quarter, prices should come down and as such India could look to capitalize on OPEC+ policy of producing and shipping more oil.’
Domestic Pressures on Russia After Drone Attacks
In September, Kyiv carried out significant drone attacks on Russia’s northwestern regions, causing damage to port infrastructure and pipelines. This raised concerns about Russia’s capacity to maintain its oil supply for both export and domestic consumption. Mr. Das clarified that current data doesn’t definitively show that all Russian oil redirected from domestic refineries has been shifted to exports. He commented, ‘Whilst there has been an uptick in exports in August and September, it is conceivable that there has been some production drop in Russia as well,’ further noting, ‘As such lower availability of Russian oil would increase the price, and mean that India receives lower discounts and that there is simply less Russian oil to buy on the market.’