- No Russian oil purchases since January 10 sanctions
- Share of Russian crude in India’s imports expected to decline
- Indian Oil remains confident in energy security despite US restrictions
- US oil could emerge as an alternative, but at what cost?
Russian Oil in Trouble – Will India Look Elsewhere?
India’s largest oil refiner, Indian Oil Corporation Limited (IOCL), has halted all new Russian crude oil purchases following the US sanctions imposed on January 10. Chairman A S Sahney confirmed that no new spot contracts with Russian suppliers have been finalized since the sanctions took effect.
Currently, Russian oil accounts for 25-30% of Indian Oil’s total imports, but this figure is expected to dip in the coming months.
“A lot of Russian entities have been sanctioned, which will impact availability not just for India or China, but for the global market. We will be affected, but only marginally,” Sahney explained.
With Russian oil under scrutiny, the big question is—will India shift to new suppliers, or find a way to keep Russian crude flowing?
US Sanctions Shake Up India’s Oil Strategy
The Biden administration’s latest sanctions targeted major Russian oil producers Gazprom Neft and Surgutneftegaz, along with 180 tankers involved in shipping Russian oil.
The move aims to choke Moscow’s oil revenues, which the US claims are funding the Ukraine conflict. Additionally, Washington seeks to disrupt Russia’s “shadow fleet”, a network of vessels that allegedly bypass Western restrictions.
For India, the effects are immediate—the share of Russian crude in its import basket is set to fall.
Russia, which accounted for just 0.2% of India’s oil imports before 2022, skyrocketed to 40% in 2023-24, becoming India’s top crude supplier. But with sanctions in place, India is now reassessing its sourcing strategy.
Energy Security Intact – India’s Backup Plan
Despite the uncertainty, Indian Oil remains confident that India’s energy supply will not be severely impacted.
India has been diversifying its crude sources, now importing from 39 countries, compared to 29 previously.
“We are still assessing the full impact of these sanctions, but we are confident that crude availability for Indian refiners will not be significantly affected,” said Sahney.
The company is actively looking for “clean” Russian crude—meaning oil shipments where the supplier, insurer, and tanker are not under sanctions.
Could this be a loophole that allows Russian crude to keep flowing into India?
Will India Turn to US Oil? The Price Will Decide
With Donald Trump promising to boost US oil production, Indian Oil is open to increasing imports from the US—but only if the price is right.
“The Indian government has already indicated that we are willing to buy more energy from the US, provided it is available at a competitive price,” Sahney stated.
This could be a win for US oil producers, but will they offer rates that match or beat Russia’s discounted crude?
What’s Next? Will Oil Prices Stay Stable?
Indian Oil predicts that crude prices will hover between $75-$80 per barrel over the next six months to a year, as global supply increases.
But with geopolitical tensions rising, Russia looking for new buyers, and India adjusting its strategy, could we see new market dynamics unfold?
One thing is certain—the global oil game is changing fast, and India is carefully weighing its next move.
