India’s Gasoline Supply to Russia: Understanding the Implications of Reverse Oil Flow
India’s gasoline exports to Russia have emerged as a notable development amid ongoing geopolitical tensions. Reports indicate that Indian traders have sold approximately 60,000 metric tons of gasoline produced by Nayara Energy, a refinery backed by Russian interests. This comes as Russia grapples with significant damage to its refining capacity due to the war in Ukraine, prompting the country to seek gasoline imports to meet domestic demand.
Oil Minister Hardeep Singh Puri clarified that Indian companies are not directly selling gasoline to Russia. He stated that the gasoline is being purchased from traders rather than directly from Indian firms. The minister attributed Russia’s need for imports to damage sustained by its refineries during the conflict.
Impact of the Ukraine War on Russian Refining Capacity
The ongoing war in Ukraine has severely impacted Russia’s refining capabilities. Estimates suggest that over 40% of Russia’s refining capacity has been affected by persistent strikes and drone attacks. This has led to a mismatch between crude oil production and the ability to produce refined products, particularly gasoline, which has seen a year-on-year decline of approximately 25%.
Sourav Mitra from Grant Thornton Bharat noted that Russian refinery throughput has fallen to its lowest level since 2009, with average runs declining to about 4.69 million barrels per day by April 2026. As a result, 78 out of 83 Russian regions are experiencing gasoline shortages or supply disruptions. In response, Russia has imposed temporary restrictions on gasoline exports to prioritize domestic availability.
India’s Role as a Gasoline Supplier
Russia is reportedly planning to import around 400,000 tons of gasoline monthly from various countries, including India. Recent amendments to Russia’s tax code provide subsidies on fuel imports, which could integrate Indian gasoline into Russia’s fuel-subsidy framework. India is among the world’s largest gasoline exporters, with shipments averaging 350,000 to 400,000 barrels per day.
Experts highlight that Indian refiners are capable of producing gasoline that meets the Euro-5 standards required in Russia. This positions India as a pivotal refining hub, where discounted Russian crude is processed into premium gasoline products. However, major Indian refiners maintain that they are not directly supplying fuel to Russia, with any transactions likely occurring through intermediaries due to existing sanctions.
Prashant Vasisht from ICRA noted that the trade is expected to continue until Russian refineries are repaired. He emphasized that while India’s gasoline exports to Russia may increase, they are unlikely to significantly impact India’s overall refining industry. The trade’s future may be influenced by regulatory and geopolitical developments, including potential sanctions on shipping and financial institutions involved in these transactions.
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