Russian oil imports to India are losing their earlier price advantage as competition from China, higher premiums and improved Middle Eastern flows reshape the economics of crude procurement. The shift is significant not because New Delhi has announced a formal policy reversal, but because refiners appear to be changing their buying decisions in response to market conditions, shipping costs and growing sanctions risk.
Indian refiners have reduced purchases of Russian crude for November delivery, according to people familiar with the matter cited by Bloomberg in a report published by the Economic Times. Russia’s flagship Urals crude loaded in the Baltic is being offered at premiums of more than $10 a barrel to Dated Brent, the report said. Barrels that were previously available at steep discounts are now priced almost at par with Middle Eastern grades, weakening one of the main commercial reasons for Indian refiners to buy them.
That change has broader implications for India’s refining system. Since Western sanctions redirected Russian oil away from European buyers after Moscow’s 2022 invasion of Ukraine, Indian refiners have become a crucial outlet for Russian crude. The arrangement allowed Indian companies to access discounted barrels while maintaining flexibility in their refinery operations and fuel exports. But the advantage depended on the discount being large enough to compensate for longer voyages, freight volatility, payment complications and geopolitical risk.
The reported numbers indicate that this advantage has narrowed sharply. Russia’s share of India’s crude imports fell to about 35% in September from as high as 56% in July, according to Kpler data cited in the report. Shipments averaged 310,000 barrels a day in the four weeks through October 4, the lowest level since March 2022, based on tanker-tracking data compiled by Bloomberg.
The fall does not mean that Russian crude has disappeared from India’s supply mix. China and India remain the biggest buyers of Russian oil, and the final destination of some cargoes is assigned only after the vessels have already begun their voyages. But the direction of travel is clear in the available data: Russian supply has become less dominant in India’s import basket, while refiners are examining alternatives from the Persian Gulf and the Americas.
The immediate pressure is coming from the price of Russian barrels. Sumit Ritolia, senior manager of modelling at Kpler, said Chinese imports of Russian crude had increased in recent months, adding competition for cargoes that might otherwise have been available to Indian refiners. The report linked the increase in Chinese demand partly to reduced Chinese access to Iranian crude. As buyers compete for a smaller pool of available Russian cargoes, the discount that once made those barrels attractive has narrowed.
This is an important distinction in understanding India’s energy choices. The reported shift is not presented as the result of a government order requiring refiners to stop buying Russian crude. The people cited by Bloomberg said New Delhi had not asked refiners to cut Russian imports in response to the risk of US tariffs. Instead, commercial calculations appear to be doing much of the work. India’s oil ministry did not immediately respond to a request for comment, according to the report.
The alternative is not simply cheaper or more expensive crude at the point of purchase. It is a delivered-cost calculation that includes the distance travelled, tanker availability, freight rates, insurance exposure and the reliability of the route. Middle Eastern crude has gained appeal because tankers are travelling through the Strait of Hormuz in greater numbers and Gulf cargoes generally require shorter voyages to Indian refineries than Russian barrels loaded in the Baltic.
The report said Middle Eastern flows had recovered to about 80% of prewar levels, citing Shell Chief Executive Officer Wael Sawan. That recovery has taken place despite continuing risks linked to Iranian attacks on shipping. For Indian refiners, the return of more Gulf barrels offers a supply option with potentially lower transport costs at a time when tanker freight rates are rising.
This makes the current shift a test of how India’s refining sector balances three competing priorities: securing sufficient crude, protecting refinery margins and limiting exposure to geopolitical disruption. Russian oil provided a major opportunity after sanctions altered global trade routes. But that opportunity was never independent of global competition. The same sanctions-driven redirection that brought Russian cargoes to India also made China a major buyer and changed the bargaining position of sellers and refiners.
India’s refining capacity gives this procurement decision consequences beyond the crude market. Indian refiners do not only process oil for domestic consumption; they also export refined products. The Economic Times report noted that India’s diesel exports reached a one-year high in September as record margins supported shipments to Europe. That means the cost and origin of crude can influence the competitiveness of India’s fuel exports, not just the price paid by domestic refiners.
When Russian crude was heavily discounted, refiners could potentially improve margins by processing it and selling products into international markets. If the discount disappears, the economics of that model become less attractive. Middle Eastern supplies may carry a higher headline crude price in some transactions, but shorter voyages and lower shipping costs can narrow or reverse the difference in delivered cost. The relevant comparison for refiners is therefore not the origin of the crude alone, but the total cost of bringing it into the refinery and converting it into saleable products.
The changing supply mix also shows why India’s energy security cannot be measured only by the number of supplier countries. Diversification can reduce dependence on one source, but it can also intensify competition for alternative supplies. If Indian refiners move towards Gulf barrels at the same time as other Asian refiners seek similar cargoes, demand for Middle Eastern crude could rise. The report said the shift could intensify competition for Gulf barrels as Asian refiners secure supplies for the final months of the year.
That competition is taking place within a transport system exposed to disruption. The Strait of Hormuz remains strategically important to Gulf oil flows, and the report described risks from increasing Iranian attacks on shipping as still elevated. The recovery of flows to approximately 80% of prewar levels provides evidence of improved movement, but it does not remove the vulnerability of a supply chain concentrated around a narrow maritime passage.
For Indian policymakers, the reported procurement shift therefore has two separate dimensions. The first is commercial: refiners are free to choose the most economical crude available, and current pricing appears to be making some Middle Eastern grades more attractive. The second is strategic: a larger dependence on Gulf supply may reduce exposure to Russian sanctions and long-haul freight costs while increasing sensitivity to disruptions around the Persian Gulf.
The available evidence does not establish that India is abandoning Russian oil, nor does it show that Middle Eastern supplies will permanently replace Russian barrels. It shows a market response at a particular point in the purchasing cycle. November cargo decisions, September import shares and the four-week shipment average through October 4 all point to a reduction in Russian volumes, but the final composition of India’s crude basket will continue to depend on pricing, sanctions enforcement, tanker availability and regional supply conditions.
The larger urban and economic question is how these changes reach households and businesses. Crude procurement occurs far from Indian cities, but its effects run through refineries, fuel distribution networks, transport operators, industrial users and public finances. A change in supplier can affect refinery margins and export competitiveness without producing an immediate visible change at a petrol station. Conversely, a disruption in shipping or a rise in delivered crude costs can travel quickly through the wider economy.
What the current evidence confirms is that Russian oil’s earlier commercial advantage has weakened. Indian refiners are responding by increasing attention to Middle Eastern and American supplies, while China’s demand is adding pressure to the Russian crude market. The developments that require monitoring are the scale of November arrivals, the future share of Russian oil in India’s imports, the durability of Gulf flows through the Strait of Hormuz and whether freight and sanctions risks continue to alter the delivered-cost equation.
