Daijiworld Media Network - New Delhi

New Delhi, Nov 5: India is poised to curb its direct imports of Russian crude oil starting late November, following the introduction of new US sanctions targeting Rosneft and Lukoil, which come into effect on November 21.

Analysts expect major Indian refiners, which account for over half of the country’s Russian crude purchases, to comply with the sanctions. These refiners convert the imported crude into fuels like petrol and diesel, making their decisions critical to the country’s oil supply chain.

Maritime intelligence firm Kpler forecasts that this move will sharply reduce Russian crude arrivals in December. However, shipments are expected to gradually recover by early 2026 through intermediaries and alternative trading routes.

Reliance Industries Ltd, India’s top importer with a long-term Rosneft contract, has confirmed it will halt Russian oil imports. Two other state-backed refiners, Mangalore Refinery & Petrochemicals Ltd (MRPL) and HPCL-Mittal Energy Ltd (a joint venture of Hindustan Petroleum and Lakshmi Mittal’s Mittal Energy), have also announced plans to suspend future imports. Together, these three refiners accounted for more than half of India’s 1.8 million barrels per day of Russian crude imports in the first half of 2025.

In contrast, Nayara Energy’s Vadinar refinery, partly owned by Rosneft and already under EU sanctions, is expected to maintain its Russian crude intake.

Sumit Ritolia, Lead Research Analyst (Refining & Modelling) at Kpler, noted that Russia remained India’s top crude supplier in October, followed by Iraq and Saudi Arabia. Russian shipments reached 1.6–1.8 million barrels per day before the sanctions, with declines already visible after October 21 as refiners sought to avoid potential US OFAC penalties.

Analysts suggest that while Russian barrels will not disappear entirely, future imports will involve more complex logistics and trading arrangements.

To compensate for reduced Russian supplies, Indian refiners are diversifying their sources, increasing purchases from the Middle East, Latin America, West Africa, Canada, and the United States. US crude imports to India hit 568,000 barrels per day in October—the highest since March 2021—driven primarily by favorable economics rather than sanctions. Flows are expected to normalize to 250,000–350,000 barrels per day in December and January.

Ritolia added, “We expect a significant decline in Russian crude arrivals post-November 21 as most Indian refiners comply with US sanctions. This will likely be followed by a gradual recovery through early 2026 as new intermediaries and trading routes emerge.”

He emphasized that while Nayara Energy’s Vadinar refinery is unlikely to change its procurement pattern, other refiners will continue to broaden their import basket, sourcing more from Brazil, Argentina, Colombia, Guyana, the US, West Africa, and the Middle East. However, higher freight costs could limit substitution, as rising transportation expenses reduce arbitrage advantages.

Overall, while Russian crude imports to India may dip in the near term, barrels are expected to continue arriving through indirect channels, ensuring a degree of continuity in supply.