India’s Russian oil imports, which have evidently emerged as a significant sticking level for the Donald Trump administration in its relationship with New Delhi, helped Indian refiners save at the very least $12.6 billion in a bit over three years, exhibits an evaluation of India’s official commerce knowledge by The Indian Specific, evaluating the landed worth of India’s Russian oil imports with crude from different nations. These obvious financial savings—whereas vital for Indian refiners—are usually not as excessive as what had been anticipated initially, and the efficient reductions on Russian crude narrowed significantly over time, falling to their lowest within the 2024-25 fiscal. However there could also be far more than meets the attention.
It’s value remembering that had New Delhi not stepped in to purchase Russian oil, international crude costs would more than likely have been significantly increased, which might have led to a ballooning of India’s oil import invoice as nicely given the nation’s excessive reliance on oil imports. When seen from that lens, the presumptive financial savings for India can be considerably greater than what the commerce knowledge evaluation suggests, relying on how a lot increased the worldwide worth of oil would have gone had India not ramped up the import of Russian crude after it was eschewed by a lot of the West.
This can be among the many explanation why India has proven no indicators of buckling below American strain on the difficulty of oil imports from Russia. Additionally, whereas there’s a home trade-off at play—the apparently prohibitive price of sky-high US tariffs on India’s small and medium exporters versus the comparatively decrease financial savings accrued by massive refiners by shopping for discounted Russian crude—Trump’s public posturing has made it troublesome for India to chop again on Russian oil instantly even when it needed to. It’s clear that New Delhi doesn’t need to compromise on its strategic autonomy and is unwilling to be dictated to by Washington on whom it must be doing enterprise with, notably in relation to Russia—an outdated and key strategic companion for India.
Indian refiners’ hefty imports of Russian crude are seen as a lever that the Trump administration believes it might use to drive the Kremlin’s hand into ending the Ukraine warfare. Oil exports are the largest income for Moscow, and New Delhi is the second-largest purchaser of its oil after Beijing. Early August, Trump introduced a further 25 per cent tariff—over and above the 25 per cent tariff introduced on Indian items—as a penalty for India’s Russian oil imports. The hit is predicted to be vital for a bulk of India’s items exports to the US, which had been valued at round $87 billion in 2024-25. Notably, whereas Trump has slapped further tariffs on India, it has not taken any such motion thus far in opposition to China, the largest purchaser of Russian oil.
New Delhi has termed the Trump administration’s motion “unjustified and unreasonable” and mentioned these imports started as its conventional provides had been diverted to Europe, with the US having “actively inspired such imports by India for strengthening international power markets stability”. The Joe Biden administration had inspired India to extend Russian oil imports following Russia’s February 2022 invasion of Ukraine because the West started shunning Moscow’s oil. The rationale was easy: Russia is a significant oil exporter and if a bulk of its oil goes off the marketplace for dearth of consumers, worldwide oil costs may shoot up, one thing that the US itself didn’t want.
The Indian authorities continues to take care of that the nation will purchase oil from wherever it will get the most effective deal, so long as the oil will not be below sanctions. There aren’t any sanctions on Russian oil; it is just topic to a worth cap imposed by the US and its allies that applies if Western transport and insurance coverage companies are used for transporting the oil. India’s public sector refiners have acknowledged that they haven’t obtained any sign or directive from the federal government on the difficulty, and they’re going to proceed to purchase Russian oil so long as it stays economically and commercially viable.
Russian oil math: reductions and financial savings
When Russia invaded Ukraine in February 2022, Moscow’s share in New Delhi’s oil imports was lower than 2 per cent. With a lot of the West snubbing Russian crude following the invasion, Russia started providing reductions on its oil to keen consumers. Indian refiners had been fast to avail the chance, resulting in Russia—earlier a peripheral provider of oil to India—rising as India’s largest supply of crude inside a matter of months, displacing the normal West Asian suppliers. Presently, Russia accounts for greater than a 3rd of India’s oil imports by quantity.
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In 2022-23, India’s complete oil import invoice was $162.21 billion. Had Indian refiners paid for Russian oil the common worth they paid for crude from all different suppliers put collectively, the oil import invoice would have been $167.08 billion, or $4.87 billion increased, exhibits The Indian Specific’s evaluation of India’s commerce knowledge. The worth of oil imports from Russia for the interval was round $31 billion, and the common landed worth of Russian crude for Indian refiners was $83.24 per barrel, about $13 decrease than the common landed worth of non-Russian barrels, translating into an efficient low cost of 13.6 per cent to the common worth of oil imported from different supplying nations.
Whereas the value of crude oil relies on grades and their costs can fluctuate considerably, the common landed worth of crude and import volumes from the supplying nations had been used for computations as the federal government doesn’t launch grade-wise knowledge.
In 2023-24, though the efficient low cost on landed worth of Russian oil to non-Russian barrels averaged decrease at 10.4 per cent, the financial savings had been increased at $5.41 billion as the quantity of oil imports from Russia rose considerably to round 609 million barrels from 373 million barrels in 2022-23, the evaluation exhibits. In 2023-24, the common landed worth of Russian crude imported by India was $76.39 per barrel, $8.89 decrease than the common landed worth of non-Russian oil.
The 2024-25 fiscal, nonetheless, noticed a major erosion in reductions in addition to financial savings. The low cost for the 12 months averaged at simply 2.8 per cent, resulting in financial savings of simply $1.45 billion, with the landed worth of Russian crude—$78.5 per barrel—simply $2.3 decrease than the common landed worth of a non-Russian barrel of oil imported into India. Within the June quarter of 2025-26—the interval until which country-wise and commodity-specific commerce knowledge is obtainable—the low cost expanded to six.2 per cent, with a Russian barrel averaging at $69.74 versus $74.37 from different suppliers, resulting in financial savings value $0.84 billion.
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In response to trade watchers and specialists, the explanations for erosion in reductions primarily embrace the overall course of decline that oil costs have taken, which have led to a major contraction within the delta between the $60-per-barrel worth cap on Russian crude and worldwide oil costs, and the notably increased price of freight and insurance coverage for Russian crude as in comparison with oil from different suppliers because of the Western curbs on Moscow’s oil commerce. Which means that whereas the reductions might need been deeper on the precise worth of oil, the low cost on landed worth—which incorporates freight and insurance coverage prices—would work out to be a lot decrease. And for India, the value that basically issues is the landed worth as that’s the price that refiners truly pay.
Presumptive financial savings could also be a lot increased
Past the precise financial savings that the commerce knowledge evaluation establishes, oil trade executives and specialists consider that the presumptive financial savings could also be notably increased, on condition that India’s quickly expanded urge for food for Russian crude contributed in conserving international oil costs in verify. This, in flip, helped India—which has an oil import dependency stage of round 88 per cent—keep away from paying far more for its oil imports.
For the sake of understanding, contemplate this: had the common landed worth of oil imported into India between April 2022 and June 2025 been increased by $10 per barrel, the nation’s oil import invoice for the 39-month interval would have been increased by almost $58 billion—a further $17.35 billion in 2022-23, $16.97 billion in 2023-24, $17.89 billion in 2024-25, and $5.34 billion in April-June of 2025-26. Had the value been increased by $20 per barrel, the extra burden would have been round $116 billion.
Even as we speak, trade specialists and analysts consider that international oil costs would leap if India stops shopping for Russian crude, as a lot of that provide is unlikely to search out consumers elsewhere given the present circumstances. In a latest report, brokerage CLSA estimated that oil costs may leap from the present ranges of round $65 per barrel to $90-$100 if India stops importing Russian oil.
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“With just a few consumers buying Russian crude, any stoppage from India could make it troublesome for Russia to search out consumers for presumably 1 million bpd or 1 per cent of worldwide provide within the close to time period. Though India ought to be capable of simply safe provide from different sellers, such a provide disruption may drive a spike in crude oil worth to $90–100 per barrel and would drive up inflation internationally, in our view,” CLSA mentioned.
“Economics apart, we consider the difficulty of Russian crude oil imports has now grow to be a political one with India reiterating its freedom to decide on its commerce companions throughout the purview of worldwide commerce guidelines,” it added.
Nomura economists estimate that given India imported round 1.8 billion barrels of oil in 2024-25, India’s annual import invoice may rise by round $1.8 billion for each $1 enhance in international crude costs. In response to an evaluation by international real-time knowledge and analytics supplier Kpler, the mixed impact of lack of discounted barrels and the potential enhance in worldwide oil costs because of a piece of Russian provide going off the market may push up India’s annual oil import invoice by as much as $11 billion. India’s financial system is susceptible to international oil worth volatility. It additionally has a bearing on the nation’s commerce deficit, international trade reserves, the rupee’s trade charge, and inflation charge, amongst others.