India’s Crude Oil Imports from Russia Drop 11% in February Amidst U.S. Sanctions

New Trade Patterns Emerge as India Diversifies Oil Suppliers Amid Geopolitical Shifts

India’s crude oil imports from Russia declined by 11% in February 2025 as U.S. sanctions on Russian energy entities began to impact supply chains. According to data from commodity analytics firm Kpler, India imported 1.48 million barrels per day (bpd) of crude from Moscow, down from 1.67 million bpd in January. This decline follows a 13% increase in Russian crude imports in January, signaling how the evolving geopolitical landscape is reshaping global oil trade.

Highlights:

• India’s overall crude oil imports fell to 4.82 million bpd in February, compared to 5 million bpd in January.
• U.S. sanctions on Russian energy firms and shadow fleet tankers have made securing Russian oil more difficult.
• India is increasingly relying on alternative suppliers, including Iraq, Nigeria, Brazil, and Argentina to offset the drop in Russian crude.
• Saudi Arabia’s oil supply to India dropped 3%, reflecting price hikes for Asian buyers.
• India’s crude imports from the U.S. saw a sharp 50% decline in February.

Impact of U.S. Sanctions on Russian Oil Supplies to India

On January 10, 2025, the United States imposed additional sanctions on key Russian energy producers, including Gazprom Neft and Surgutneftegas, as well as on 180 vessels that form part of Russia’s “shadow fleet” used to bypass restrictions. These measures aim to curtail Moscow’s oil revenue, which the U.S. claims is used to fund military operations in Ukraine.

As a result, Indian refiners—among the largest buyers of Russian oil—are facing logistical and financial challenges in securing shipments.

Short-Term Supply Disruptions for Indian Refiners

Indian refiners, including Hindustan Petroleum Corporation Limited (HPCL), Indian Oil Corporation Limited (IOCL), and Bharat Petroleum Corporation Limited (BPCL), have reported difficulties in procuring Russian oil.

HPCL Chairman Pushp Kumar Joshi acknowledged that the company would face short-term supply disruptions.
“We used to source 35-40% of our crude oil from Russia, but given the current sanctions, we are actively diversifying our procurement strategy,” he said.

Iraq Gains as India Shifts Focus to Middle Eastern Oil

As India reduces its dependence on Russia, Iraq has emerged as a major beneficiary.

• India’s crude imports from Iraq increased by 6% in February, reaching 1.08 million bpd, compared to 1.02 million bpd in January.
• However, Saudi Arabia’s exports to India declined by 3%, as Riyadh raised oil prices for Asian refiners due to the surge in demand from countries shifting away from Russian oil.
• Saudi Arabia supplied 700,000 bpd to India in February, down from 723,000 bpd in January.

India’s Oil Imports from the U.S. Plummet by 50%

Another major shift in India’s oil trade dynamics is the sharp decline in crude imports from the United States.

• India’s crude oil imports from the U.S. dropped 50% month-on-month to just 147,000 bpd in February.
• This decline is attributed to higher transportation costs and uncompetitive pricing compared to supplies from the Middle East and Africa.

India’s Oil Import Strategy: Greater Diversification Amid Global Uncertainties

With Russian oil becoming more difficult to secure, India is increasingly diversifying its crude suppliers.

Emerging Suppliers in India’s Crude Oil Market

India’s February oil import data reveals an increased reliance on non-traditional sources, including:

• Nigeria
• Brazil
• Angola
• Colombia
• Venezuela
• Qatar
• Argentina (new entrant)

Notably, BPCL purchased 1 million barrels of crude from Argentina for the first time, marking a significant shift in India’s energy procurement strategy.

India’s Expanding Global Energy Partnerships

According to Oil Minister Hardeep Singh Puri, India is undergoing a fundamental transformation in its relationships with global energy suppliers.

• “India is now purchasing crude oil from 40 different countries, compared to just 27 in 2007,” Puri stated.
• He emphasized that India’s purchasing decisions are driven by price competitiveness, adding: “We will always buy the cheapest available crude in the market.”

India’s Oil Demand Remains Strong Despite Market Shifts

Despite changes in supplier preferences, India’s overall oil demand remains robust.

Crude Oil Demand Outlook for 2025

According to Kpler’s Senior Oil Analyst, Sumit Ritolia:

• India’s oil demand in January 2025 stood at 5.26 million bpd, slightly down from December but higher year-on-year.
• Strong demand was driven by higher LPG consumption and rising transportation fuel sales.
• While overall crude imports have remained stable, supply chain adjustments are expected to continue throughout 2025.

Looking Ahead: The Future of India’s Oil Imports

Will Russia Remain a Key Supplier?

While India remains one of Russia’s biggest crude buyers, further declines in imports from Moscow are expected in March and beyond, as the full impact of U.S. sanctions sets in.

Highlights to Watch in the Coming Months:

1. The extent of India’s diversification efforts—New suppliers like Argentina could play a bigger role.
2. Potential U.S. policy changes—If additional sanctions target Russian oil, India’s import dynamics could shift further.
3. Oil price volatility—Middle Eastern suppliers, especially Saudi Arabia and Iraq, may continue to adjust pricing strategies based on global demand.

India Adapts to the Changing Global Oil Market

India’s crude oil trade is witnessing a major transformation, with U.S. sanctions on Russia reshaping import patterns. While Russian oil continues to hold significant importance, India’s growing engagement with Middle Eastern, African, and Latin American suppliers signals a broader shift toward energy security and diversification.

As the world’s third-largest oil importer, India’s ability to adapt to market fluctuations will remain critical in ensuring affordable and uninterrupted energy supplies for its growing economy.