India’s imports of Russian crude oil are expected to decline sharply in December, though analysts say the fall is the result of temporary disruptions rather than a long-term change in sourcing strategy.
According to a PTI report, citing data from real-time analytics firm Kpler, the Russian crude imports into India are expected to fall to around 1.2 million barrels per day (bpd) in December, down from 1.84 million bpd in November, marking the lowest level since December 2022.
Despite the slowdown, Indian refiners continue to purchase Russian crude from non-sanctioned suppliers.
Analysts had flagged the potential decline as early as October, attributing it to supply disruptions linked to US actions against major Russian exporters Rosneft and Lukoil, as well as the impact of European Union sanctions on flows of Russian-linked products.
“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,” PTI quoted Sumit Ritolia, Lead Research Analyst, Refining & Modeling, Kpler, as saying.
India, the world’s third-largest oil importer, emerged as the biggest buyer of discounted Russian crude after Western nations cut off purchases from Moscow following its invasion of Ukraine in February 2022.
Historically dependent on Middle Eastern oil, India significantly increased imports from Russia as sanctions and a drop in European demand made Russian barrels available at deep discounts. As a result, Russia’s share of India’s crude imports surged from less than 1% to nearly 40%.
In December, Russia remained India’s largest crude supplier, though its share slipped to under a quarter of total oil imports, down from about one-third in November.
After US sanctions on Rosneft, Lukoil and their majority-owned subsidiaries came into effect on November 21, refiners including Reliance Industries, Hindustan Petroleum, HPCL-Mittal Energy and Mangalore Refinery and Petrochemicals temporarily paused Russian crude purchases. The exception has been Rosneft-backed Nayara Energy, which continues to depend heavily on Russian oil after European Union sanctions limited 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 to 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,” he said.
As alternative sellers such as Tatneft, Redwood global supply, Rusexport, Morexport, and Alghaf Marine expand their trading footprint and take over the commercial role previously played by Rosneft and Lukoil, Russia’s exports should largely re-normalise, with volumes gradually reappearing through these new channels.
The structure will become more intermediated, but the barrels will still find their way to market, he said.
Stating that prices have been adapting to this new normal too, he said the discounts on Russian Urals grade of crude oil have stabilised at $6.50 per barrel since the beginning of the month. This represents a drop of $4.50 compared to the period preceding the announcement of US sanctions on Rosneft and Lukoil.
However, the price drop is also reflective on a weaker medium sour market in Asia, with the delivered price of competing Middle Eastern grades (Arab Light, Basrah Medium) also shedding $1.50 to $2 a barrel in the same time frame.
“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 said India receives Russian crude from suppliers other than Rosneft and Lukoil, and those 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.
“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,” he added.
With inputs from agencies
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