India's Russian Oil Imports Plunge After US Sanctions: Impact on Global Energy Trade and Alternative Sourcing Strategies

New Delhi:

India's imports of Russian oil declined by nearly one-third following the implementation of stringent US sanctions targeting key Kremlin-linked exporters on November 21. Analysts anticipate further reductions in December as refiners shift to alternative sources to avoid sanctions violations.

According to real-time data analytics firm Kpler, India's Russian crude oil imports averaged 1.8 million barrels per day (bpd) in November, representing over 35 percent of the country's total crude import mix.

November's import figures, comparing with 1.5-1.6 million bpd in October, are expected to mark a five-month high, driven by accelerated imports before the November 21 deadline.

"Pre-November 21, imports reached approximately 1.9-2.0 million bpd as buyers expedited cargo movements ahead of the deadline, after which volumes have decreased. It appears refiners accumulated crude reserves before the sanctions took effect, planning to process them once the regulations were implemented," explained Sumit Ritolia, Lead Research Analyst for Refining & Modeling at Kpler.

Subsequently, flows tracked around 1.27 million bpd, reflecting a 570,000 bpd month-on-month decrease. "Based on current loadings and voyage activity, we project December arrivals to range around 1.0 million bpd," Ritolia added. "This corresponds with our earlier assessment that Russian flows could temporarily decline toward approximately 800,000 bpd before stabilizing."

India, the world's third-largest oil importer, emerged as the primary purchaser of discounted Russian crude after Western nations shunned Moscow following its February 2022 invasion of Ukraine. Traditionally dependent on Middle Eastern oil, India substantially increased Russian imports as sanctions and reduced European demand made these barrels available at considerable discounts, elevating Russia's share from under 1 percent to nearly 40 percent of total crude imports. In November, Russia maintained its position as India's top supplier, constituting more than a third of all imported crude oil.

This pattern may now shift after US sanctions targeting Rosneft, Lukoil, and their majority-owned subsidiaries took effect on November 21, effectively designating crude linked to these companies as "sanctioned molecules."

The sanctions have prompted companies including Reliance Industries, Hindustan Petroleum Corporation Ltd (HPCL), HPCL-Mittal Energy Ltd, and Mangalore Refinery and Petrochemicals Ltd to temporarily suspend imports. The sole exception is Rosneft-backed Nayara Energy, which remains heavily dependent on Russian crude after supplies from other global sources were effectively terminated following European Union sanctions.

"For the medium term, refiners are already adapting. We're observing transitions toward non-designated Russian entities, increased utilization of opaque trading channels, and greater sourcing from the Middle East, West Africa, and the Americas," noted Ritolia. "On Russia's side, the response has been highly adaptable, involving ship-to-ship transfers near Mumbai, mid-voyage diversions, and more complex logistics to maintain barrel movement and enhance discounts." He suggested that as long as broader secondary sanctions aren't implemented, India will likely continue importing Russian crude—albeit through more indirect and less transparent routes.

Nayara Energy, operating almost exclusively on Russian grades, has been particularly notable, importing approximately 400,000 bpd in November and maintaining refinery operations of 380,000-400,000 bpd, representing a 20,000-25,000 bpd increase from October. The company has efficiently managed domestic distribution and exports to markets including Brazil, Turkey, and Sudan, while directing about one-third of clean-product shipments via ship-to-ship hubs such as Fujairah and Sohar to obscure final destinations.

Emerging suppliers like Tatneft, RusExport, MorExport, and Alghaf Marine DMCC are enabling refiners to maintain access to discounted barrels while remaining compliant with regulations.

Overall, while direct Russian imports are expected to decrease following November, this decline is viewed as temporary, with India's supply chains rapidly reorganizing to balance both geopolitical considerations and economic imperatives.