Indian refiners, led by Reliance Industries and Nayara Energy, are preparing to raise purchases of Russian crude oil by 150,000–300,000 barrels per day in September, a jump of 10–20% from August levels. The decision highlights India’s continued reliance on discounted Russian oil, even as U.S. trade pressure intensifies.
Russia has been offering Indian buyers deeper discounts of $2–3 per barrel against Brent prices, partly due to domestic refinery outages that have reduced its local processing capacity. These price cuts make Russian oil attractive for India, where energy affordability and security remain top priorities. Today, Russia accounts for nearly 40% of India’s crude oil imports, making it a central supplier.
The move, however, comes at a sensitive time. Earlier this month, the United States imposed 50% tariffs on Indian exports, arguing that India’s purchases of cheap Russian crude indirectly support Moscow’s war effort in Ukraine. Washington has warned of further trade frictions if India continues expanding its Russian oil intake.
For Indian refiners, the economics are hard to ignore. Lower crude costs improve refining margins and help reduce overall energy expenses for the economy. Yet, former RBI Governor Raghuram Rajan has urged caution, warning that India must balance short-term economic benefits against the long-term costs of strained ties with the U.S., one of its most important trade and strategic partners.
India thus finds itself in a delicate position—securing affordable energy through Moscow while trying to avoid a deeper rift with Washington. How New Delhi manages this balancing act in the coming months could shape both its economic outlook and its strategic partnerships for years to come.