India’s oil import strategy has done a sharp U-turn in the space of a few weeks. After spending months cutting back on Russian crude under American pressure, Indian refiners are back buying it in large quantities, and the reason is straightforward. The war in the Middle East has made their usual suppliers unreachable.
Indian refiners have booked approximately 60 million barrels of Russian oil for delivery in April, according to sources familiar with the purchases. The volume matches what was bought for March delivery but is more than double the February figure, according to data from intelligence firm Kpler. The cargoes were secured at premiums of between $5 and $15 a barrel over Brent, meaning India is paying above market rates, a significant shift from the steep discounts it enjoyed on Russian oil in 2022 and 2023.
How India ended up here
The chain of events that led to this moment started long before the current crisis. After Russia invaded Ukraine in early 2022, Western nations imposed sweeping sanctions on Russian energy exports. India, which imports the vast majority of its oil, took a different view. It stepped in as a major buyer, snapping up Russian crude at heavy discounts that Western buyers were refusing. For a country that runs on imported oil, the economics were too good to ignore.
That arrangement held until late last year, when Washington leaned on New Delhi to cut back. India complied, quietly reducing its Russian purchases and turning instead to suppliers in Saudi Arabia and Iraq to fill the gap.
Then the Middle East war broke out and the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world’s oil supply passes, was effectively closed to normal traffic. Saudi and Iraqi barrels that Indian refiners were counting on suddenly became inaccessible, trapped inside the Persian Gulf with no safe route out. India was left scrambling for supplies.
The American waiver that unlocked the tap
Washington moved to limit the damage by issuing a waiver allowing India to receive Russian oil that had already been loaded onto ships before March 5. The logic was practical, those cargoes were already at sea, and blocking them would only worsen the supply crunch facing one of America’s key strategic partners in Asia.
The waiver was subsequently expanded to cover other countries and updated to include purchases of crude already at sea before March 12. Indian officials in New Delhi expect the waiver to be extended for as long as Hormuz remains disrupted, according to sources cited in the reports.
The waiver gave refiners the cover they needed. Mangalore Refinery and Petrochemicals Ltd and Hindustan Mittal Energy Ltd, both of which had stayed away from Russian oil since December, have returned to the market and are buying again.
Looking beyond Russia too
India is not putting everything into one basket. While Russian oil is the primary fix for the supply gap, Indian processors are also looking at other options to reduce their dependence on any single source.
Purchases of Venezuelan crude for April delivery are projected at 8 million barrels, according to Kpler, the highest volume since October 2020. Venezuela, like Russia, has been under Western sanctions, but a similar waiver framework has allowed Indian refiners to access those barrels as the crisis deepens.
Separately, Reliance Industries has also reportedly bought 5 million barrels of Iranian oil following a US waiver, adding another sanctioned supplier back into India’s mix, something that would have been unthinkable just a few months ago.
Russia is making the most of it
For Moscow, the return of Indian demand has come at exactly the right moment and at better prices than it has seen in years. Russia is currently earning more from its crude exports than at any point since March 2022, the weeks immediately after its troops entered Ukraine, before Western sanctions began to bite.
The combination of renewed Indian demand and elevated global oil prices driven by the Hormuz crisis has given the Kremlin a significant financial windfall. The same war that is causing economic pain across much of the world is, in this particular way, working in Russia’s favour.
The bigger picture
What is happening in India’s oil market right now is a live demonstration of how quickly energy geopolitics can shift. A country that was being nudged away from Russian oil for diplomatic reasons has been pushed straight back to it by the logic of supply and price. The Middle East war did in weeks what years of Russian discounts could not quite do on their own, make Russian crude not just attractive, but necessary.
New Delhi has never made any secret of the fact that it buys oil on the basis of national interest rather than geopolitical alignment. The events of the past month have simply made that position more visible than usual. As long as the Strait of Hormuz stays closed and the waivers stay in place, India will keep buying from wherever the oil is available, and right now, a great deal of it is coming from Russia.
