India’s Strategic Oil Imports Surge: 5 Powerful Reasons Russian Crude Still Dominates

In April, India’s Russian oil imports surged to a 9-month high of 1.92 million barrels per day (39.3% of total imports), driven by discounted Urals crude and adaptable trade mechanisms to sidestep sanctions. Concurrently, U.S. crude volumes rose 16.5% to an eight-month peak, reflecting strategic efforts to rebalance trade ties amid escalating tariffs. Russia’s price advantage, reinforced by drone-induced refinery disruptions and G7 price-cap compliance, solidified its dominance, while U.S. imports—led by state refiners—signaled diplomatic pragmatism.

Traditional suppliers like Iraq and Saudi Arabia saw reduced shares as India prioritized affordability and diversification. This dual approach underscores India’s geopolitical agility: securing cost-efficient energy while navigating U.S.-Russia tensions, ensuring refinery efficiency, and bolstering long-term energy security in a volatile global market. 

India’s Strategic Oil Imports Surge: 5 Powerful Reasons Russian Crude Still Dominates

India’s energy strategy took a decisive turn in April as imports of Russian crude surged to a 9-month high, underscoring the nation’s adept navigation of global market dynamics and geopolitical pressures. With Russian oil shipments climbing to 1.92 million barrels per day (bpd)—accounting for 39.3% of India’s total imports—the trend reflects a calculated pursuit of cost efficiency amid volatile global conditions. Meanwhile, U.S. crude volumes also saw an eight-month peak, signaling India’s nuanced approach to diversifying partnerships while addressing trade imbalances.  

Why Russian Oil Remains a Priority 

At the heart of India’s pivot to Russia is the sustained discount on Urals crude, Moscow’s flagship grade, which continues to trade below rival barrels from traditional suppliers like Iraq and Saudi Arabia. Despite shrinking discounts compared to 2022 levels, Urals remains financially attractive for Indian refiners, who rely on imports to meet 85% of the country’s oil demand.  

• Price Cap Mechanics: Urals’ pricing below the G7’s $60-per-barrel cap ensures access to non-sanctioned shipping and insurance networks, sidestepping logistical hurdles.  

• Refinery Disruptions Boost Exports: Drone attacks on Russian refineries in early 2024 reduced domestic processing, freeing more crude for export—a temporary boon for buyers like India.  

• Sanctions Adaptation: Indian refiners and Russian traders have innovated payment and shipping mechanisms to comply with sanctions, ensuring uninterrupted flows. 

U.S. Crude Gains Traction: Trade Diplomacy in Play 

April also saw U.S. oil imports rise to 337,000 bpd, the highest since August 2023. This uptick aligns with India’s broader strategy to recalibrate trade relations with Washington, particularly amid escalating tariffs under the Trump administration. By boosting purchases of American energy, India aims to:  

• Mitigate trade deficits with the U.S., a key geopolitical ally.  

• Diversify supply chains beyond the Middle East, enhancing energy security.  

• Leverage high-quality, light-sweet U.S. crude suited to Indian refinery configurations. 

State-owned refiners like Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL) spearheaded 70% of these imports, reflecting government-backed efforts to align energy procurement with foreign policy goals.

Shifting Supplier Dynamics 

While Russia solidified its position as India’s top supplier, traditional partners saw reduced shares:  

• Iraq (2nd largest): Imports dipped 5.7% to 838,000 bpd.  

• Saudi Arabia (3rd largest): Volumes fell 4.6% to 539,000 bpd. 

This shift highlights India’s willingness to prioritize cost savings over long-standing supplier relationships, though Middle Eastern exporters retain leverage due to geographical proximity and established infrastructure.  

Future Outlook: Stability Amid Uncertainty 

Industry analysts project Russia’s share in India’s oil basket to hover between 30–35% in coming months, contingent on Moscow’s ability to revive refinery operations post-attacks. Any recovery in Russian domestic processing could tighten exports, potentially nudging India back toward Middle Eastern or U.S. barrels.  

Meanwhile, U.S. imports are poised to grow as both nations seek to deepen energy ties. However, this hinges on maintaining competitive pricing and resolving logistical challenges, such as longer shipping routes and higher freight costs compared to Middle Eastern crude.  

The Bigger Picture: Energy Security in a Multipolar World 

India’s import strategy underscores a pragmatic balancing act: securing affordable energy while navigating U.S.-Russia tensions and Middle Eastern volatility. By capitalizing on discounted Russian oil and fostering U.S. trade ties, New Delhi not only stabilizes its energy needs but also positions itself as a pivotal player in shaping global oil markets.  

As Sumit Ritolia of Kpler notes, “India’s refiners are mastering the art of adaptability—turning geopolitical constraints into commercial opportunities.” In an era of fragmented alliances and economic headwinds, such agility may prove indispensable.