Are Indian Refiners Really Avoiding Russian Oil? Trade, Government and Market Dynamics Explained

 Indian refiners, including Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Reliance Industries, are reportedly avoiding offers for Russian crude oil for deliveries scheduled in March and April, industry sources told Reuters, part of a wider pullback from discounted Russian supplies this year. 

The move comes as India advanced a trade framework with the United States earlier this month that could lower tariffs and deepen economic cooperation, including energy sector engagement. For U.S. policymakers, reduced reliance on discounted Russian oil has been a condition tied to reciprocal tariff reductions. 

Russian Crude Imports Have Already Dropped Sharply

India became one of the world’s top buyers of discounted Russian seaborne crude after Moscow invaded Ukraine in 2022, with imports peaking above 2.0 million barrels per day (bpd) in mid-2025. Recent trade and industry data show imports have fallen to the lowest levels in two years as of December 2025. 

Sources familiar with market flows said refiners were preparing to cut Russian crude imports below 1 million bpd by March, with volumes potentially declining further to 500,000–600,000 bpd, a sharp drop from last year’s average of around 1.7 million bpd. 

Private refiner Nayara Energy, which operates a 400,000 bpd facility and traditionally sources Russian oil, may continue purchases, though it has no plans to load Russian crude in April due to a scheduled maintenance shutdown. 

Industry data show that Indian refiners have been turning to crude from the Middle East, Africa, and South America, diversifying their feedstock to reduce dependence on any single source. Recent purchases include 2 million barrels of Venezuelan crude by IOC and HPCL, signalling a broadening of supply channels beyond Russia. 

Commercial Decisions, Strategic Diversification

Commerce and Industry Minister Piyush Goyal clarified that decisions on crude imports are made by domestic buyers and are not imposed by the India-US interim trade agreement framework. He told news agencies that oil sourcing choices remain commercially driven and fall under the purview of individual refiners and market dynamics.  Goyal added that diversifying sources of energy supply, including crude oil, LNG, and LPG, is in India’s strategic interest to enhance energy security and reduce over-reliance on any single region. This approach, he argued, underpins India’s broader energy policy even as trade ties with the U.S. evolve. 

While the interim trade framework announced with the United States did not explicitly mention Russian oil, remarks from U.S. officials had linked tariff concessions to India’s willingness to curtail imports of Russian crude. In response, New Delhi has emphasised its energy security priorities and the need for diversification, rather than a wholesale exit from Russian supplies. 

The Kremlin also commented that India remains free to procure oil from any country and that diversification of energy sources reflects longstanding practice rather than a shift dictated by external agreements. 

Market Impact and Outlook

The contraction in Russian crude imports has implications for global oil market balances and for refiners’ procurement strategies. Reduced imports from Russia coincide with a broader geopolitical backdrop that includes narrowing price discounts on Urals crude, tightening Western sanctions on Russian oil logistics, and a growing role for Middle Eastern and Venezuelan grades in India’s crude basket.

Energy analysts say India’s evolving procurement patterns reflect both global market conditions and strategic diversification goals, with refiners balancing short-term commercial imperatives against long-term energy security considerations.

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