India’s Demand for Discounted Crude Boosts RIL and Nayara Energy
India has solidified its position as the leading destination for Russian Urals crude oil, accounting for a staggering 80% of the shipments in 2025. The country’s two major private refineries, Reliance Industries Ltd. and Nayara Energy Ltd., have significantly ramped up their purchases of this discounted oil. Recent data reveals that India acquired 231 million barrels of Urals crude through June 24, with these two companies collectively responsible for 45% of Russia’s exports of this medium-sour grade oil.
Growing Demand for Urals Crude
The demand for Urals crude among Indian refiners has seen a remarkable increase over the years, particularly in 2025. Reliance Industries has emerged as the largest global buyer of Urals, securing 77 million barrels this year alone. This surge in procurement is part of a decade-long contract that Reliance signed with Russia, allowing it to purchase up to 500,000 barrels daily starting in January. Notably, Urals crude now makes up 36% of Reliance’s total crude acquisitions, a significant rise from just 10% in 2022. Similarly, Nayara Energy has seen Urals represent 72% of its oil procurement, up from 27% three years ago.
India’s increasing reliance on Russian oil underscores its strategic energy needs and highlights the vital role it plays in generating revenue for Russia. As of 2024, India is projected to control 74% of Urals crude exports, reflecting a shift in the global oil market dynamics. This trend comes as Chinese independent refineries, once major buyers of Russian oil, have reduced their purchases due to stricter tax policies and lower domestic demand.
Impact on Government-Owned Refineries
While private refiners like Reliance and Nayara dominate the Urals crude market, government-owned refineries in India, such as Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp. Ltd., have not established long-term contracts with Russia. These companies face additional restrictions regarding the currencies they can use for crude oil purchases, limiting their ability to compete effectively in the market. The increased purchases by private companies have also led to a tighter supply of Urals crude, which has resulted in reduced spot market discounts for government-owned refiners.
Industry sources indicate that the discount for Urals crude has decreased to under $2 per barrel from $4 in the previous year’s second quarter. This shift in pricing dynamics poses challenges for government-owned refineries as they navigate the changing landscape of crude oil procurement.
Future Procurement Strategies
Looking ahead to 2025, Hindustan Petroleum is adopting a more diversified procurement strategy by sourcing crude from African nations, including Gabon and the Republic of the Congo. Analysts suggest that with OPEC+ signaling its intent to regain market share, there may be an increase in Middle Eastern crude availability in the coming months. This could lead to higher flows of Middle Eastern oil to India, particularly from Saudi Arabia, as the country seeks to balance its energy needs amid evolving global market conditions.
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