Russia to Remain India's No 1 Crude Oil Supplier: Analysts

India's crude oil imports from Russia saw a marginal decline in September, but continued to account for over one-third of the country's total oil purchases, despite US pressure to curb the trade over concerns that it supports Moscow's war effort in Ukraine.

India's crude imports in September were around 4.7 million barrels per day, up 2,20,000 bpd month-on-month and flat year-on-year.

Russian crude maintained its position as the largest single supplier, contributing about 1.6 million bpd - a 34 per cent share. However, this was roughly 1,60,000 bpd below the average Russian volumes imported during the first eight months of 2025, preliminary data by global trade analytics firm Kpler showed.

"Despite the dip, Russian barrels remain among the most economical feedstock options for Indian refiners, given their high GPW (gross product worth) margins and discounts relative to alternatives," said Sumit Ritolia, Lead Research Analyst (Refining & Modelling) at Kpler.

Iraq was the second biggest crude oil supplier to India at around 8,81,115 bpd, followed by Saudi Arabia at 6,03,471 bpd and the UAE at 5,94,152 bpd. The United States was India's fifth largest supplier at 2,06,667 bpd.

Russia became India's top crude oil supplier, following the outbreak of the Ukraine war in 2022, overtaking traditional sources like Iraq and Saudi Arabia.

As some Western nations shunned Russian purchases, Moscow offered steep discounts, prompting Indian refiners to ramp up purchases and secure cheaper barrels to meet rising domestic demand. Russian oil share rose from less than 1 per cent prior to the Ukraine war to over 40 per cent.

More than three years after Russia's invasion of Ukraine, neither the US nor any international body has sanctioned the purchase of Russian crude oil, which is refined into fuels like petrol and diesel.

In July, six months into his presidency, US President Donald Trump first threatened tariffs on Indian imports to pressure New Delhi to reduce its Russian oil purchases.

In August, he imposed an additional 25 per cent tariff on US imports of Indian goods, adding to the existing 25 per cent duty, while refraining from similar measures against China, another major buyer of Russian oil.

Russian oil will continue to remain the centrepiece of the Indian diet as fuel demand rises in the festive season.

"Russian barrels are likely to remain the core of the import mix, though refiners are clearly placing more emphasis on diversification across the Middle East, Americas, and Africa," Ritolia said.

He expected India-bound Russian spot loadings to remain flat to slightly higher in October-December when compared to the previous quarter.

"Still, ongoing disruptions to Russia's downstream system suggest crude exports will remain healthy, and discounts could edge higher again to support flows." In October-December, current flows of 1.6-1.8 million bpd of Russian imports look "more realistic", with upside capped unless market dynamics (higher discounts) shift significantly in Russia's favour, he said.

One bullish factor for India's Russian crude imports is the anticipated resumption of northern Iraqi crude exports via Turkey's Ceyhan port. If Turkey reduces Russian crude intake - estimated at 3,50,000 bpd in Q3 2025 - as EU sanctions tighten further from January 2026, those displaced barrels are likely to flow to Asia, with India and China as major destinations.

"The Russia-India crude relationship is now more about balance than barrels. India is unlikely to step away from Russian supplies in the near to mid-term. Russian barrels still priced below most other grades, and even with narrower discounts compared to the USD 10-20 per barrel spreads seen earlier, refiners won't leave a dollar on the table unless directed by New Delhi - just as happened with Iranian barrels," he said.

While there has been a stronger push for diversification, Russian crude remains central.

"Supply chains are embedded, term deals are locked, and contracts are typically signed 6-10 weeks before arrival. Rewiring all that takes time. In practice, Indian refiners are gradually broadening their baskets, not to replace Russia in the short term, but to enhance energy security, continuity, and flexibility," he added.