Indian Refiners to Increase Middle East, Latin American, and US Crude Imports as Russian Supplies Under Sanctions Pressure

October 24, 2025, New Delhi: Indian refiners are re-evaluating their strategy for crude oil procurement amid rising sanctions on Russian energy majors. The action is a follow-up to new US sanctions on Rosneft and Lukoil announced on October 22, which prohibit American firms from business transactions with the two companies and caution that secondary sanctions may also hit non-US companies. The US Treasury has ordered that all current transactions with the sanctioned Russian producers be terminated by November 21.

Russia’s Key Role in India’s Crude Imports

Russia is currently providing close to a third of India’s overall crude imports at an average of 1.7 million barrels per day (mbd) as of 2025. Of these, close to 1.2 mbd is directly received from Rosneft and Lukoil. Large private refiners such as Reliance Industries Ltd and Nayara Energy absorb the majority of these imports, with the state-run oil firms holding comparatively smaller Russian allotments.

Russian crude streams are expected to stabilize at 1.6-1.8 mbd until November end. This follows, which direct Rosneft and Lukoil imports could plunge sharply as Indian refiners try to meet US sanctions and avoid exposure risks.

Reliance and Nayara Face Strategic Challenges

Reliance Industries, whose 25-year-long-term Russian supply deal with Rosneft is for up to 500,000 barrels per day, is likely to pre-forward Russian supplies until November 21. Later, the company can shift to spot market buying through third-party intermediaries while keeping within the Office of Foreign Assets Control (OFAC) rules.

Industry experts recommend that Russian crude imports would fall temporarily until December 2025, before trending upwards in early 2026 as alternative trade channels become available.

For the Russian oil-dependent Nayara Energy, diversification opportunities are more limited. With its high operational reliance and previous experience with sanctions, Nayara will likely keep importing Russian barrels through established avenues while engaging in limited alternative sourcing.

Higher Import Costs and Supply Diversification

As the sanctions deadline looms, Indian refiners are increasing Middle East, Brazilian, Latin American, West African, Canadian, and US procurement to offset sanctioned Russian grades. But it has a cost — increasing freight rates and reduced price discounts are likely to escalate India’s import bills.

Industry experts calculate that substituting low-priced Russian barrels with domestically priced crude can add about 2% to India’s yearly import bill.

In spite of this, India’s refining system is still one of the most versatile in the world, with the ability to handle various types of crude — from heavy grades like Basra Medium and Maya to lighter mixtures like WTI and Arab Extra Light. It is pointed out by experts that the major worry is losing pricing benefit, but not the technical viability of processing alternative grades.

Outlook: Russian Crude to Continue Flowing Indirectly

Though Russian imports in the near term are projected to dip, India will not completely withdraw from Russian crude. Refiners will likely continue to source through non-sanctioned middlemen or through blended cargoes that are imported through neutral markets. State-owned refiners, which have historically kept their exposure to Russian suppliers low, would operate more cautiously but are unlikely to stop importing altogether.

A total shut-off of Russian crude supplies seems unlikely unless India is hit with direct secondary sanctions or else imposes them on itself. Meanwhile, Russian oil should continue to find its way indirectly into Indian refineries via alternative trade and funding channels.

With shifting global energy dynamics, Indian refiners will be able to find a judicious balance between geopolitical prudence and economic imperative — maintaining uninhibited refinery runs while keeping compliance and reputational risks to the bare minimum.

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