India’s Historic Purchase of Russian Crude Oil: Refining and Reselling Petrol Amidst Russia’s Import Needs

India has emerged as a key supplier of gasoline to Russia, filling a significant gap in the latter’s fuel supply. In August, Russia’s seaborne gasoline imports reached a record 125,000 barrels per day, totaling approximately 470,000 tonnes for the month. Reports indicate that Indian refiners supplied around 1 million barrels of gasoline to Russia over the past two months.

Disruptions in Russian Fuel Production

The surge in gasoline imports is largely attributed to disruptions in Russian fuel production caused by Ukrainian drone strikes on refineries. Energy analytics firm Vortexa noted that these attacks have led to a decline in domestic output by as much as 70%. Consequently, Russia has been compelled to import gasoline despite ongoing restrictions on fuel sales within the country. The gasoline supplied from India primarily originated from the Vadinar refinery in Gujarat, which is operated by Nayara Energy, partly owned by Russia’s Rosneft.

India’s shift towards Russian crude supplies has intensified since 2022, with Russian oil becoming a major source for producing fuels like petrol and diesel. In June and July, India imported over 2.6 million barrels per day of Russian crude, a significant increase from 1 million barrels per day in February. Russian oil accounted for more than half of India’s total crude imports during these months, and some of the gasoline shipped to Russia may have been produced using this crude.

Sanctions and Tariff Threats

The U.S. is advancing the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which could impose tariffs of up to 100% on countries purchasing large quantities of crude oil and gas from Russia. If enacted, the U.S. President would have the authority to decide on the application of these tariffs. The U.S. Trade Representative would review the five largest importers of Russian energy every 180 days to determine if tariffs should be imposed.

Countries that source less than 15% of their total energy needs from Russia and are actively working to reduce that dependence may qualify for exemptions. The current list of the five largest importers of Russian energy likely includes China, India, Slovakia, Hungary, and Azerbaijan. This legislative move comes as India’s reliance on Russian crude oil has reached unprecedented levels, following a shift in supply dynamics due to the conflict in Ukraine.

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