India's Russian oil imports surge to 10-month high in May amid diversification push

Time of India

03-06-2025

India's imports of Russian crude oil surged to a 10-month high of 1.96 million barrels per day (bpd) in May, driven by continued availability at discounted prices compared to global benchmarks, according to ship-tracking data from Kpler.
As the world's third-largest oil importer and consumer, India imported around 5.1 million bpd of crude in May. This crude is processed into fuels such as petrol and diesel at domestic refineries, PTI reported.
Russia remained India's top supplier, accounting for over 38% of the total imports. Iraq held its position as the second-largest supplier with 1.2 million bpd, followed by Saudi Arabia at 615,000 bpd. The United Arab Emirates (UAE) supplied 490,000 bpd, while the United States rounded out the top five with 280,000 bpd—reflecting India's ongoing efforts to diversify its energy sources and mitigate geopolitical risks.
'Overall, India's crude import profile for May 2025 highlights its price-sensitive, diversified sourcing strategy. Russian volumes remain elevated despite external pressures, reinforcing the primacy of economic pragmatism in India's energy policy,' said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler.
India, which traditionally sourced most of its oil from the Middle East, significantly ramped up Russian oil purchases following the Ukraine conflict in February 2022.
With Western sanctions and a reduced European appetite for Russian oil, Moscow began offering deep discounts that appealed to cost-conscious buyers like India.
As a result, Russia's share in India's oil imports rose sharply from under 1% before the conflict to between 40% and 44% at its peak.
Ritolia noted that Russia continues to offer crude at prices that are attractive when compared to global benchmarks like Brent and Dubai, and even versus Middle Eastern grades on a landed cost basis.
'The strong inflow of Russian barrels into India is driven by a combination of economic, operational, and geopolitical factors,' he said.
A major advantage comes from the pricing of Russian Urals crude, which—while not always heavily discounted—is still significantly cheaper than West African and Middle Eastern grades.
'This pricing edge has supported stronger refinery gross margins for Indian processors. For instance, in May, average FOB prices for Urals stood around $50 per barrel, comfortably below the $60 a barrel price cap set by Western allies,' Ritolia added.
This attractive pricing drew substantial shipping resources, including at least 20 tankers previously used for non-sanctioned trades, now repurposed to transport Urals.
As a result, Russian export volumes to India rose notably.
Looking ahead, Ritolia expects Russian crude to retain a 30–35% share in India's oil import basket, especially if refining margins stay robust, FOB economics remain favorable, and sanctions continue to be limited in scope.
However, he cautioned about emerging headwinds. 'Kpler data suggests a modest rebound in Russian refinery throughput, potentially increasing by 100,000–300,000 bpd in the coming months. This could reduce Russia's export availability by a corresponding margin and may slightly temper flows to India post-May,' he said.
India is likely to maintain a diversified crude basket, but Russian barrels will remain central to its strategy—so long as discounts persist and payment mechanisms stay viable.
With the onset of the monsoon season, some Indian refiners may scale back operations, which could temporarily reduce crude imports, particularly of lighter, sweeter grades, he noted.
Crude exports from the Middle East are expected to hold a stable or slightly lower share in India's import mix in the near term. This will be shaped by seasonal refinery adjustments and continued competition from Russian supplies. Still, the Middle East remains a long-term strategic component of India's oil supply network.
Following Russia's invasion of Ukraine in February 2022, the U.S., European Union, and other Western nations imposed sweeping sanctions aimed at crippling the Russian economy. A major target was Russian oil exports, which faced restrictions and a shrinking European market.
To find alternative buyers, Russia began selling oil at steep discounts—sometimes as much as $18–20 per barrel below global prices. India, with its vast energy needs and sensitivity to oil price fluctuations, capitalized on these offers.
Although the price gap has narrowed in recent months, the discounts continue to make Russian oil economically attractive. In December 2022, the G7 introduced a price cap of $60 per barrel on Russian seaborne crude. This restricts Western firms from providing insurance and shipping services for Russian oil sold above that level.
Russia has circumvented the cap by acquiring a fleet of older tankers and using alternative insurance options.
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