In March 2025, India’s imports of Russian petroleum products reached an unprecedented 1.6 million metric tonnes, valued at $810.1 million, marking a 2.7-fold increase in volume and a tripling in value compared to the same period in 2024, according to an analysis by Sputnik based on Indian Commerce and Industry Ministry data. This surge, the highest in the history of bilateral trade, reflects a strategic pivot in India’s energy procurement, driven by discounted Russian supplies following Western sanctions imposed after Russia’s 2022 invasion of Ukraine. The Centre for Research on Energy and Clean Air reported in April 2025 that India’s crude oil imports from Russia averaged 1.76 million barrels per day (bpd) in the fiscal year 2024-25, constituting 36% of India’s total oil imports, a 7.3% rise from the previous year. This shift has significantly reduced the market share of traditional suppliers like Iraq and Saudi Arabia, with the latter’s exports to India dropping to a 14-year low, as documented by Reuters in April 2025.
The economic rationale for India’s increased reliance on Russian petroleum is rooted in cost competitiveness. In October 2024, the discount on Russian Urals crude widened by 77% to $5.14 per barrel against Brent crude, per the Centre for Research on Energy and Clean Air’s November 2024 report. This pricing advantage has enabled Indian refiners, notably Reliance Industries and Rosneft-backed Nayara Energy, to capitalize on refining margins. Reliance, operating the world’s largest refinery complex in Jamnagar, Gujarat, exported 36.1 million metric tonnes of refined petroleum products in fiscal year 2023, accounting for nearly 80% of India’s total refined oil exports, as noted in a September 2024 report by the National Bureau of Asian Research. The profitability of refining discounted Russian crude has bolstered India’s position as the world’s second-largest exporter of petroleum products, with exports valued at $86.28 billion in 2023.
Geopolitically, India’s energy trade with Russia underscores a delicate balancing act. The European Union and G7 nations implemented a $60 per barrel price cap on Russian crude in December 2022 to curb Moscow’s war revenues, as outlined in the Centre for Research on Energy and Clean Air’s March 2025 analysis. However, a loophole allows non-sanctioning countries like India to import Russian crude, refine it, and export products to price-cap coalition countries. In 2024, India’s diesel and jet fuel exports to the EU surged by 58%, with an estimated €8.5 billion of these products derived from Russian crude over 13 months to December 2023, according to the Centre for Research on Energy and Clean Air. This refining loophole has amplified Russian export revenues indirectly, raising concerns among Western policymakers about its impact on sanctions efficacy.
India’s import patterns reveal a structural shift in global oil trade flows. The International Energy Agency’s April 2025 Oil Market Report noted that India’s total crude imports reached 5.3 million bpd in March 2025, a 1.3% increase from February, with Russia supplying 1.7 million bpd, the highest in five months. This uptick followed a temporary decline in Russian supplies from November 2024 to January 2025, when U.S. sanctions targeted 183 vessels in Russia’s shadow fleet, as reported by Reuters in January 2025. These sanctions, enforced by the U.S. Treasury’s Office of Foreign Assets Control, disrupted deliveries, forcing Indian refiners to briefly diversify to Middle Eastern and African sources. By March, non-sanctioned vessels restored Russian supply chains, with discounts narrowing to $2.60-$2.80 per barrel for Urals crude, per Reuters’ March 2025 data.
The environmental risks associated with Russia’s aging shadow fleet, used to transport 84% of its seaborne crude in January 2025, pose significant challenges. The Centre for Research on Energy and Clean Air’s February 2025 report highlighted that these tankers, often with questionable maintenance and inadequate protection and indemnity insurance, could result in cleanup costs exceeding €1 billion in the event of an oil spill. India, as a major coastal importer, faces potential ecological and financial liabilities, particularly as 77% of its March 2025 petroleum product imports from Russia were crude-based, valued at €2 billion, according to the Centre’s April 2025 analysis.
India’s first-quarter 2025 imports of Russian petroleum products totaled 2 million metric tonnes, valued at $1.05 billion, a significant escalation from the $711 million recorded for 1.4 million tonnes in October 2023, as per Sputnik’s June 2025 analysis. This growth aligns with India’s broader energy demand, projected by the International Energy Agency in its 2025 World Energy Outlook to rise faster than any major economy by 2035, driven by robust economic growth and urbanization. India’s domestic crude production, at 12.3% of its needs in 2023-24, necessitates imports for 87.7% of consumption, as reported by Eximpedia in September 2024.
The strategic implications of India’s energy pivot extend beyond economics. The National Bureau of Asian Research’s September 2024 analysis emphasized that India’s increased purchases, surpassing China’s 1.76 million bpd in July 2024, reflect a pragmatic approach to energy security amid geopolitical tensions. Prime Minister Narendra Modi’s engagements with both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky in July and August 2024, respectively, illustrate India’s non-aligned stance, balancing economic benefits with diplomatic relations, as noted in the same report. However, this approach has drawn scrutiny from Western allies, with the U.S. urging stricter adherence to sanctions, per Reuters’ January 2025 coverage.
Refining capacity enhancements have further enabled India’s import surge. The World Bank’s 2024 India Development Update highlighted investments of over $10 billion by Indian refiners to process diverse crude grades, reducing costs and increasing export competitiveness. Nayara Energy, 49.1% owned by Rosneft, processed 20% of India’s Russian crude imports in 2024, complementing Reliance’s dominance. These refineries have shifted trade dynamics, with the Organization of the Petroleum Exporting Countries’ share in India’s imports dropping to 48.5% in 2024-25, a record low, as reported by Reuters in April 2025.
Sanctions have reshaped shipping logistics, with G7-insured vessels transporting 36% more Russian crude to India in March 2025 compared to January, per the Centre for Research on Energy and Clean Air. This shift followed a 21% decline in shadow fleet usage, prompted by U.S. sanctions, which increased freight costs for Russian ESPO Blend crude by 15% in January 2025, according to Reuters. Indian refiners, cautious of sanctions, have insisted on non-sanctioned vessels, aligning with India’s official policy of purchasing only from compliant suppliers, as stated in a March 2025 Reuters report.
The economic benefits for India are substantial but not without trade-offs. The United Nations COMTRADE database recorded India’s 2023 crude oil imports from Russia at $48.64 billion, with $12.54 billion in the first half of 2024, per TradeImeX’s August 2024 analysis. These savings have curbed inflation, with India’s consumer price index for fuel remaining stable at 4.5% in 2024, according to the Reserve Bank of India’s March 2025 Monetary Policy Report. However, reliance on Russian supplies exposes India to supply chain vulnerabilities, as evidenced by a 55% drop in Russian crude imports in November 2024 due to tightened sanctions, per the Centre for Research on Energy and Clean Air.
India’s export of refined products, particularly to the EU, has geopolitical ramifications. The Hindu reported in November 2024 that India’s diesel exports to the EU, largely derived from Russian crude, doubled from pre-2022 levels to 154,000 bpd. This trade, valued at €2.6 billion in October 2024, underscores India’s role as a refining hub, but it also fuels debates over the ethics of circumventing Western sanctions, as highlighted by the European Central Bank’s August 2022 trade flow analysis. The lack of restrictions on refined products allows India to legally supply price-cap coalition countries, complicating efforts to limit Russia’s war funding.
The interplay of sanctions, pricing, and logistics continues to shape India’s energy strategy. The Centre for Research on Energy and Clean Air’s December 2024 report noted a 57% month-on-month surge in India’s Russian crude imports, reaching a four-month high, driven by long-term contracts with Russian suppliers. However, state refineries, reliant on spot markets, diversified to Middle Eastern sources when Russian volumes fell in November 2024, illustrating India’s adaptive procurement strategy, as per the same report.
Global oil market dynamics are also affected. The International Energy Agency’s March 2025 Oil Market Report indicated that increased Russian supplies to India and China have cooled Middle Eastern crude prices, with Dubai benchmark spreads tightening by 8% in March 2025. This shift benefits Asian refiners but pressures OPEC producers, whose market share in India fell from 43.8% to 41.6% between April and September 2024, according to Reuters’ October 2024 data.
India’s energy trade with Russia reflects a broader recalibration of global energy flows. The World Trade Organization’s 2025 Trade Profiles noted that India’s petroleum product exports, valued at $90 billion in 2024, have strengthened its trade balance, with a 5% surplus in goods trade. Yet, dependence on Russian oil, while economically advantageous, risks diplomatic friction, as evidenced by U.S. concerns over sanction circumvention, per Reuters’ January 2025 analysis.
The environmental footprint of this trade is non-trivial. The use of shadow tankers, which conducted €119 million in ship-to-ship transfers in EU waters in March 2025, raises concerns about maritime safety, per the Centre for Research on Energy and Clean Air. India’s coastal infrastructure, handling 1.96 million bpd of Russian crude in May 2025, as reported by Kpler in June 2025, must address these risks to mitigate potential ecological damage.
In conclusion, India’s record-breaking imports of Russian petroleum products in 2025, peaking at $810.1 million in March, underscore a strategic alignment of economic pragmatism and geopolitical maneuvering. The interplay of discounted pricing, refining capacity, and sanctions navigation has positioned India as a pivotal player in global energy markets, with implications for trade balances, environmental risks, and international relations. As India’s energy demand grows, its reliance on Russian supplies will likely persist, shaping both regional and global economic landscapes.
