New Delhi— Indian refiners are preparing to diversify their crude oil imports toward the Middle East, Latin America, and the United States following Washington’s latest sanctions on Russia’s two largest oil producers, Rosneft and Lukoil, analysts and industry sources confirmed.
The U.S. government’s October 22 sanctions prohibit all American entities from doing business with the two Russian companies and warn non-U.S. firms of possible secondary penalties. The U.S. Treasury has set November 21 as the deadline to wind down all ongoing transactions involving these firms.
Russia currently meets nearly one-third of India’s oil demand, supplying about 1.7 million barrels per day (mbd) — of which 1.2 mbd comes from Rosneft and Lukoil. Most of these shipments are purchased by Reliance Industries Ltd and Nayara Energy, with smaller allocations to public-sector refiners.
Industry experts said that direct Russian oil imports will likely dip after November 21 as refiners seek to avoid the risk of U.S. sanctions. Sumit Ritolia, Lead Research Analyst at Kpler, said Reliance — which has a long-term contract with Rosneft — could be among the first to scale back purchases. Nayara, already dependent on Russian oil, has limited alternatives.
However, Indian refiners are expected to increase imports from the Middle East, Brazil, Latin America, West Africa, Canada, and the U.S. to offset the loss. Ritolia cautioned that higher freight costs could limit large-scale substitution opportunities.
Prashant Vasisht, Senior Vice President at ICRA Limited, noted that the sanctions could marginally raise India’s oil import bill. “Replacing Russian crude with market-priced supplies may push India’s annual import bill up by nearly 2 per cent,” he said.
Russia exports around 7.3 million barrels per day, or 7 per cent of global demand. With its top exporters now under sanctions, Moscow faces growing challenges to sustain its oil trade.
State-run refiners, already cautious, are expected to reduce direct Russian transactions further to avoid secondary sanctions tied to shipping, insurance, and finance. Ritolia added that Reliance may front-load purchases before the November deadline and later pivot to indirect trade through third-party intermediaries.
A temporary dip in Russian crude arrivals is likely in December, followed by gradual recovery by early 2026, as new trade channels emerge. Despite disruptions, complete disengagement from Russian oil appears unlikely, given India’s refining flexibility and the profitability of discounted Russian grades.
Unless India’s government formally restricts Russian crude or refiners face direct sanctions, Russian oil will continue to reach India, albeit through more complex supply chains.
