New Delhi: A significant shift is unfolding in India’s energy import strategy as major state-run oil refiners have paused their purchases of Russian crude oil. According to sources close to the matter, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and Mangalore Refinery and Petrochemicals Limited (MRPL) which collectively account for nearly 60% of India's refining capacity have suspended fresh Russian oil contracts due to shrinking price advantages and mounting geopolitical risks.
India has been one of the largest consumers of discounted Russian oil since sanctions hit Moscow following its invasion of Ukraine. However, the narrowing of price spreads between Russian and non-Russian grades, coupled with complications in payment mechanisms and transportation logistics, has made continued purchases less economically viable. Furthermore, diplomatic signals from Washington are being closely read in New Delhi, especially after U.S. President Donald Trump threatened 100% tariffs on countries continuing trade with Russia without commitments toward a Ukraine peace deal.
The move does not apply to India’s private sector refiners, such as Reliance Industries and Nayara Energy, which continue to import Russian crude. However, even private players are feeling the heat. The European Union’s latest sanctions have complicated tanker movements and led to storage overflows. Nayara has reportedly scaled down its refining operations to around 70–80% capacity due to supply chain disruptions and a shortage of international buyers willing to take on the legal risk of sanctioned cargo.
For the time being, state-run Indian refiners are switching to Middle Eastern and African crude grades to ensure supply continuity. Abu Dhabi’s Murban and various Nigerian grades are now filling the gap left by Russian Urals and Sokol crude. Though these alternatives are costlier, refiners are opting for greater predictability and fewer legal hurdles in procurement.
Despite this pause, industry insiders suggest that Indian state refiners could return to Russian oil purchases if market conditions stabilize or improve. Officials reportedly consider this a “temporary recalibration” rather than a complete exit from Russian crude dependence. However, the pause marks a major inflection point in India’s energy diplomacy balancing its strategic autonomy with the economic reality of a volatile global oil market.
In the longer term, the developments underscore a growing trend of diversification in India’s crude sourcing strategy. The decision also demonstrates India's responsiveness to evolving global norms and the need to align energy security with foreign policy imperatives. As sanctions intensify and supply chains grow more fragmented, the role of intermediaries and agile procurement strategies will become even more critical in shaping India’s energy future.