New Delhi: Russian oil had been an affordable source of energy for India for years. It kept refineries running and helped the country to manage its fuel costs without panic. December is now changing that picture. Officials say India’s imports of Russian crude are set to fall to their lowest level in three years. New restrictions from the United States and the European Union have made banks and refiners far more cautious, pushing Indian companies to scale back and look for alternative suppliers.
The war in Ukraine pushed Western capitals to tighten their grip on Moscow. Washington recently expanded its sanctions, hitting giants like Rosneft and Lukoil. Buyers were told they had until November 21 to wind down business with these companies. That deadline changed the behaviour of Indian banks almost overnight.
They began subjecting payments to layers of checks. No financial institution wants to drift near the sanctions net, and this anxiety has trickled down through the oil supply chain. Industry officials say government-owned refiners are moving with caution because a single misstep can freeze payments or lead to compliance trouble.
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The change becomes clearer when one looks at the numbers. Refiners rushed to build their inventories before the sanctions deadline, which pushed November’s imports sharply higher. Kpler’s estimates suggest that India received close to 1.87 million barrels per day of Russian crude that month. December is moving in the opposite direction, with industry sources expecting the figure to fall to roughly 600,000 to 650,000 barrels per day.
The fall looks even more striking when compared with October, when India imported about 1.65 million bpd, slightly higher than September. The mood has changed since then. The European Union has announced a January 21 cut-off. After that date, it will not accept fuel from refineries that used Russian crude in the previous 60 days.
How India’s Big Oil Companies Are Reacting
The geopolitical pressure has forced almost all major Indian fuel company to change their strategy. State-run refiners such as the Mangalore Refinery Private Limited (MRPL), the Hindustan Petroleum Corporation Limited (HPCL) and the Mittal Energy have almost stopped taking Russian cargoes, while the Indian Oil Corporation (IOC) and the Bharat Petroleum Corporation Limited (BPCL) have told suppliers that they will only buy from sources that are free of sanctions.
Nayara Energy, which has Rosneft as a shareholder, has continued to process Russian crude because many non-Russian suppliers have stepped back from dealing with it.
Reliance Industries has adjusted its plan as well. The company says it will process only those shipments that were committed before October 22, and since one of its refineries is tied closely to export markets, it is following international compliance rules with extra care.
A New Oil Game Begins
The shift has led to another trend that Washington would watch closely. India’s share of U.S. crude imports reached its highest level since June 2024. Refiners tapped the “arbitrage window” that opened when prices in different regions drifted apart, making US barrels more attractive.
Diplomatic pressure is also playing its role. Washington recently doubled tariffs on India’s imports, raising them to 50 percent, citing India’s continued purchase of Russian oil. Trade officials say this move has created a new undercurrent. India may now be compelled to increase its energy intake from the United States simply to ease the tariff burden.
India’s oil economy is now entering unfamiliar terrain. December marks the moment when a long-trusted supply line from Russia begins to fade, and a new era of American barrels steps in. The choices made over the next few weeks will decide how India powers its economy in the months ahead.
