India’s Spot Crude Oil Demand Declines as Russian Supplies Rebound

Indian Refiners Reduce Spot Oil Purchases with Russian Flows Normalizing

Indian refiners are scaling back spot crude oil purchases as shipments from Russia, their top supplier, recover to near-normal levels. This shift underscores India’s ability to navigate US sanctions while maintaining access to discounted oil.

According to industry sources, India’s state-owned refiners have secured over three dozen Russian crude cargoes set to load in April 2025. When combined with deliveries for private refiners such as Reliance Industries Ltd. and Nayara Energy Ltd., the total number of Russian crude shipments to India next month could exceed 60 cargoes, amounting to nearly 52 million barrels.

US Sanctions Initially Disrupted Russian Oil Flows

Russia’s crude exports to India declined in early 2025, dropping to 1.6 million barrels per day (bpd), compared to an average of 1.8 million bpd in 2024, as per Kpler data.

This decline followed stricter US sanctions, which led Indian refiners to issue a series of spot tenders, forcing them to buy costlier crude from alternative suppliers. However, traders have now secured enough “clean” Russian cargoes—shipments that have not been handled by US-sanctioned entities—to fulfill a significant portion of India’s demand for the coming months.

Discounted Russian Crude Helps Cut Costs

• Most April cargoes were secured at a discount of less than $3 per barrel to global benchmarks.

• Earlier in 2025, discounts had shrunk to as little as $1 per barrel, primarily due to higher freight costs resulting from sanctions.

By ensuring a steady flow of affordable Russian crude, Indian refiners are expected to reduce their reliance on spot market purchases, which typically involve higher-priced oil from the Middle East, Africa, and the Americas.

Geopolitical Shifts Influence Market Sentiment

The increase in Russian oil flows to India coincides with changing US policies. European officials have indicated that the Trump administration has reduced its focus on enforcing Russian sanctions, potentially as part of efforts to end the war in Ukraine.

This shift in enforcement has reassured buyers, contributing to the renewed flow of Russian crude to India.

India’s Energy Strategy Remains Focused on Cost Efficiency

India, the world’s third-largest crude importer, has consistently prioritized securing oil at competitive prices. While the initial tightening of US sanctions temporarily disrupted the trade, Indian refiners have now adjusted their sourcing strategies, ensuring continued access to affordable Russian crude.

As Russian flows stabilize, India’s spot market activity is expected to decline, allowing refiners to optimize procurement costs and maintain profit margins in an evolving geopolitical landscape.