New Delhi: India’s imports of Russian crude oil are expected to register a sharp pullback in December, slipping to around 1.2 million barrels per day (bpd) from 1.84 million bpd in November, according to estimates by Kpler. The decline marks the lowest level of Russian crude imports into India since December 2022. Analysts, however, said the drop reflects temporary disruptions rather than a structural change in India’s crude sourcing strategy, with refiners continuing to buy Russian oil from non-sanctioned entities.
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The decline, flagged by analysts as early as October, has been driven by disruptions following US action against major Russian exporters Rosneft and Lukoil, as well as the impact of European Union sanctions on Russian-linked product flows.
“India's appetite for Russian crude cooled sharply in December, with imports falling to their lowest levels since 2022 as major refiners cut intake following sanctions on Rosneft and Lukoil. This appears to be a near-term adjustment, with Russian crude imports into India expected to recover gradually from January as new intermediaries step in and supply chains re-establish,” said Sumit Ritolia, Lead Research Analyst, Refining & Modeling, Kpler.
India, the world’s third-largest oil importer, emerged as the largest buyer of discounted Russian crude after Western countries shunned Moscow following its February 2022 invasion of Ukraine.
From accounting for under 1 percent of India’s crude imports, Russian oil’s share rose to nearly 40 percent as sanctions and reduced European demand pushed barrels into Asia at steep discounts.
In December, Russia remained India’s largest crude supplier, but its share fell to less than a quarter of total imports, down from about a third in November.
Following US sanctions on Rosneft, Lukoil and their majority-owned subsidiaries that took effect on November 21, refiners including Reliance Industries, Hindustan Petroleum, HPCL-Mittal Energy and Mangalore Refinery and Petrochemicals temporarily halted Russian crude imports.
The exception has been Nayara Energy, backed by Rosneft, which continues to rely heavily on Russian crude after EU sanctions curtailed alternative supply options.
“Russian crude oil imports to India are retreating sharply in December, with volumes forecast to fall to around 1.2 million bpd (25 per cent of India's total import) - down from 1.84 million bpd in November,” Ritolia said.
“The decline is largely driven by reduced intake from major buyers, particularly Reliance Industries (RIL) and the New Mangalore refinery, both of which have significantly scaled back Russian crude purchases during the month.”
In December, Indian refiners pivoted towards non-designated Russian entities, opaque trading channels, and alternative suppliers across the Middle East, West Africa and the Americas.
“However, December’s headline drop only tells part of the story. Beneath the surface, Russian crude flows into India are increasingly being rerouted through a growing web of intermediaries, traders, and logistical workarounds. While direct purchases have softened, the underlying demand signal remains intact, and Russian barrels are expected to retain a structural presence in India's crude slate given pricing economics, refinery compatibility, and limited near-term alternatives,” Ritolia said.
As alternative sellers such as Tatneft, Redwood Global Supply, Rusexport, Morexport and Alghaf Marine expand their trading footprint and replace Rosneft and Lukoil’s commercial role, Russia’s crude exports are expected to gradually re-normalise, he added. “The structure will become more intermediated, but the barrels will still find their way to market.”
Ritolia said pricing dynamics are also adjusting to the new environment, with discounts on Russian Urals crude stabilising at USD 6.50 per barrel since the start of the month — around USD 4.50 lower than levels seen before US sanctions on Rosneft and Lukoil were announced.
The narrowing discount also reflects a weaker medium sour crude market in Asia, with delivered prices of competing Middle Eastern grades such as Arab Light and Basrah Medium declining by USD 1.50 to USD 2 per barrel over the same period.
“As long as broader secondary sanctions are not enforced, India is expected to continue importing Russian barrels as economics support the case, albeit increasingly through indirect and less transparent channels, keeping these barrels structurally embedded in India's crude basket,” he said.
Ritolia clarified that Indian refiners continue to receive Russian crude from suppliers other than Rosneft and Lukoil, and such flows remain legal for now.
“The sanctions announced by the US target specific companies (Rosneft, Lukoil, and their majority-owned subsidiaries), not all Russian oil or all Russian producers. This means that crude supplied by non-designated Russian entities or independent traders using non-sanctioned intermediaries can still be legally purchased by Indian refiners, as long as no sanctioned entity, vessel, bank, or service provider is involved,” he said.
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“Russian oil itself is not sanctioned; the suppliers are. That is why non-designated producers can legally step in to fill part of the gap created by the Rosneft/Lukoil restrictions,” Ritolia added.
