India’s Major Refiners Consider Halting Direct Russian Oil Imports by Late November, Exploring Alternative Sources
India is set to significantly reduce its direct imports of Russian crude oil starting in late November, following the implementation of new U.S. sanctions targeting major Russian oil companies, Rosneft and Lukoil. These sanctions, which take effect on November 21, are expected to impact Indian refiners who currently rely on Russian crude for over half of their petrol and diesel production. Analysts predict a notable decline in Russian crude deliveries in December, with a gradual recovery anticipated by early 2026 through alternative trading methods.
Major Refiners Cease Russian Supply
In response to the impending sanctions, several major Indian refiners are halting their purchases of Russian crude. Reliance Industries Ltd, which has a long-standing supply agreement with Rosneft, is expected to stop importing Russian oil. Additionally, two state-controlled refiners, Mangalore Refinery and Petrochemicals Ltd, along with HPCL-Mittal Energy Ltd, have confirmed their plans to cease Russian imports. Collectively, these three companies accounted for more than half of India’s 1.8 million barrels per day of Russian crude imports during the first half of 2025. However, Nayara Energy, which operates the Vadinar refinery and is partially owned by Rosneft, is likely to continue its Russian crude imports despite existing EU sanctions.
Diversifying Supply Sources
According to maritime intelligence firm Kpler, Russia was India’s leading crude supplier in October, followed closely by Iraq and Saudi Arabia. Kpler’s Lead Research Analyst, Sumit Ritolia, indicated that most Indian refiners are expected to comply with U.S. sanctions, leading to a reduction or complete halt in direct purchases from Rosneft and Lukoil. While Russian oil will still be part of India’s import strategy, future deliveries will necessitate more complex logistics and trading arrangements. To compensate for the anticipated decline in Russian supply, Indian refiners are increasing their purchases from alternative sources, including the Middle East, Latin America, West Africa, Canada, and the United States. Notably, U.S. crude imports to India reached 568,000 barrels per day in October, marking the highest level since March 2021, driven primarily by economic factors rather than sanctions.
Future Outlook for Indian Refiners
Looking ahead, analysts expect a sharp decline in Russian crude imports in December, followed by a gradual recovery as new intermediaries and alternative routes are established. Ritolia noted that while higher freight costs could limit the extent of substitution by diminishing arbitrage opportunities, Indian refiners are poised to further diversify their sourcing. This includes increasing crude procurement from Latin America, the U.S., West Africa, and the Middle East, while still maintaining a level of Russian oil imports through intermediaries. The evolving landscape of crude oil sourcing reflects the broader implications of geopolitical tensions and economic strategies in the global oil market.
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