Discounted Russian crude strengthens India’s grip on cost-effective energy supplies

India’s dependence on discounted Russian crude oil remained firm in May, with imports touching a 10-month high of 1.96 million barrels per day (bpd), reflecting the country’s continued focus on securing cost-effective energy amid volatile global markets. According to ship-tracking data from Kpler, Russia once again emerged as India’s top oil supplier, accounting for over 38 percent of the total crude imported last month.

As the world’s third-largest oil consumer, India imported around 5.1 million bpd of crude oil in May, refining it into essential fuels like petrol and diesel to meet domestic demand. Even as geopolitical tensions persist and Western sanctions on Moscow remain in place, Indian refiners have consistently capitalized on Russia’s willingness to offer crude at rates well below prevailing international benchmarks.

“India’s crude import patterns clearly reflect economic pragmatism. Despite external pressures, the availability of competitively priced Russian barrels continues to influence procurement decisions, safeguarding refining margins and keeping domestic fuel prices in check,” said Sumit Ritolia, Lead Research Analyst at Kpler.

The enduring appeal of Russia’s Urals crude lies in its pricing advantage over other popular grades from the Middle East and West Africa. Since the conflict in Ukraine began in February 2022, India has rapidly diversified its oil imports, shifting from a heavy dependence on Middle Eastern suppliers to embracing Russia as a key energy partner. From accounting for less than 1 percent of India’s crude imports pre-war, Russian oil now consistently represents between 30 and 44 percent of the country’s monthly intake.

Looking ahead, Russian crude is expected to retain a significant share in India’s import mix, though some moderation could occur if Russian refinery runs increase, potentially reducing export availability. Seasonal factors like the monsoon season may also lead to temporary reductions in crude processing by Indian refiners.

While Middle Eastern suppliers remain a vital part of India’s energy security framework, the ongoing competition from Russian barrels has reshaped trade dynamics. Despite the strategic significance of Gulf producers, their share in India’s crude basket may soften in the near term as price-sensitive buyers like India continue to prioritise affordability.

The shift underscores India’s determination to insulate its economy from global crude price shocks and maintain fuel price stability for its population, even amid shifting geopolitical alliances.