Indian refiners could technically run without Russian oil, but doing so would carry significant economic, strategic, and operational trade-offs, energy analysts have cautioned.
Data from global analytics firm Kpler shows Russian crude now accounts for up to 38 per cent of India’s total refinery intake, providing high yields of middle distillates such as diesel and jet fuel that match the country’s refining configurations. The deep discounts on Russian Urals crude have allowed both state-owned and private refiners to operate above nameplate capacity while maintaining strong margins.
However, the recent escalation in US trade measures, including President Donald Trump’s announcement of an additional 25 per cent tariff on US imports from India, raising duties to 50 per cent, has renewed scrutiny of New Delhi’s energy dependence on Moscow. The tariffs, targeting around USD 27 billion worth of non-exempt Indian exports, have sparked speculation over whether India might scale back or halt Russian oil purchases.
“Indian refiners can operate without Russian crude from a technical standpoint, but the shift would involve major economic and strategic trade-offs,” Kpler said in its report US Tariffs on Indian Imports: Implications for Energy Markets & Trade Flows.
Also read: TN export firms to gauge tariff effect before resuming production
India’s imports of Russian crude surged after Western sanctions were imposed on Moscow in 2022. From a negligible 1.7 per cent share in FY20, Russia’s share climbed to 35.1 per cent in FY25, making it India’s largest oil supplier. In volume terms, imports touched 88 million tonnes last year out of a total of 245 million tonnes.
Kpler estimates that non-Russian crude grades cost around USD 5 per barrel more than Russian barrels on a landed basis. Substituting 1.8 million barrels per day (bpd) at that price difference could raise India’s annual crude import bill by USD 3–5 billion, and potentially USD 7–11 billion if global prices rise in response.
Replacing Russian supplies would likely involve a multi-regional sourcing approach, dominated by the Middle East, with supplementary volumes from the US, West Africa, and Latin America. Yet none of these sources match Russian oil in cost, yield profile, or reliability.
Grades like WTI Midland are lighter and produce more gasoline and naphtha, reducing diesel output and squeezing export earnings. Even Middle Eastern grades, closer in quality, are tightly priced to official selling benchmarks, leaving little room for profit arbitrage.
“In addition to higher feedstock costs, Indian refiners would face elevated freight and credit charges. The transition is commercially painful, even if technically feasible,” Kpler said.
The Indian government has reiterated its position on safeguarding energy security, indicating that any shift away from Russian supplies will be weighed against domestic economic stability.
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