Indian refiners are bracing for a substantial drop in Russian crude supplies, with about 60% of sanctioned barrels falling out of the market, Prashant Vashisht, VP & co-head of ICRA India told EnterpriseAM as US pressure and steep tariffs linked to the trade continue. “Middle East producers would be key beneficiaries of any reduction in volumes procured from Russia,” Vashisht said.

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Reliance Industries — India’s largest importer of Russian crude — denied reports that its refinery will receive Russian cargo deliveries for January, according to a post on X. The Mumbai-based conglomerate was responding to a Bloomberg report based on Kpler data that suggested Russian oil tankers were bound for its Jamnagar refinery.

Imports under pressure: Stricter US and EU sanctions against Russian oil majors Rosneft and Lukoil are already slowing crude flows to India.

A structural slowdown in Russian crude

Russia’s share of India’s crude purchases has fallen from nearly 40% at its post-war peak to less than 25% as of early January, driven in part by Reliance halting Russian oil purchases following the latest US sanctions, Economic Times reports.

How refiners are adjusting: The decline in Russian inflows is likely to persist as sanctioned barrels disappear from India’s import basket, Vashisht said. While refiners will continue to source from non-sanctioned entities, the overall volume of Russian cargoes will remain lower even as discounts have widened to high single digits, Vashisht noted.

Russia’s share in India’s crude purchases rose from 22% in FY 2023 to 36% in FY 2024 and FY 2025, before easing to 34% in 1H FY 2026. But India’s refining system is diversified, Vashisht noted. “Indian refiners procure from a variety of sources globally as most refineries are able to process varieties of crudes.” While India can substitute Russian barrels with supplies from the Middle East, Africa, or South America, “the import bill for crude oil would increase,” adding pressure on retail prices.

Why it matters: Despite the ongoing recalibration, Vashisht stressed that India’s large refiners have the scale and logistical reach to adjust quickly. “Indian refiners will buy from sources that make the most economic and commercial sense and are not sanctioned.” While proximity has historically favoured Middle East barrels, Indian refiners also source from Brazil, Africa, and the US when commercially viable.

The near-term trend, however, points to deeper Middle East reliance. Any sustained reduction in Russian barrels will reinforce the Gulf’s weight in India’s energy security matrix, with pricing, freight dynamics, and sanctions compliance all shaping how refiners buy barrels through 2026.

What to watch: Indian authorities have asked refiners to submit weekly disclosures of Russian and US crude intake to provide primary import data to Washington amid ongoing and delayed trade discussions, Reuters reported last week.

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