As expected, India’s crude import from Russia fell sharply in December after the US sanctions against two Russian crude majors — Rosneft and Lukoil — kicked in from November 21. The Russian share in total crude imports fell from 36.3 per cent (1.84 million barrels per day or mbpd) in November to 24.1 per cent (1.2 mbpd) in December (up to December 25).
Indian imports of Russian crude had peaked at 44.4 per cent this June, after which it began to decline, as the US first threatened and then imposed a 25 per cent penalty tariff on India for indirectly supporting the Russian war against Ukraine by buying its crude (which came into effect from August 27).
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The Russian share fell to 33 per cent in October but went up to 36.3 per cent in November due to the frontloading in view of the US sanctions.
Three reasons for surge
But this is more likely to go up in January and beyond that for three major reasons. One, Reuters reported on Wednesday (December 24) that Reliance Industries had obtained a one-month concession from Washington to receive supplies from Rosneft beyond November 21. Oil industry sources say the Reliance is known to enjoy global heft.
Two, Kpler, a global real-time data and analytics provider, says Nayara Energy continues to get supply from Rosneft (which has 49 per cent stake in it) and that “many new intermediary companies have come up” quickly to fill the supply gap, and the discount continues to be attractive.
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Three, the US appears to have gone soft on Russian crude, thereby easing the pressure. It hasn’t extended sanctions to other Russian suppliers; not imposed secondary sanctions against the importers; and given a reprieve to Nayara Energy to continue buying from the sanctioned Rosneft.
Curiously, the US share of crude hasn’t increased.
After peaking at 11.6 per cent (of India’s total crude imports), its share fell to 8.9 per cent in November and then 7.5 per cent in December (up to December 25). This means India is relying more on the Middle East countries, its No.1 supplier (over 40 per cent share).
The following graph maps the Russian and US shares in India’s total crude imports, respectively, since January 2025.
How much do Rosneft and Lukoil — the two Russian majors producing 49.2 per cent of its crude — contribute to India’s imports?
Of the total Russian crude, Rosneft’s share averages 54 per cent during the calendar year (January to December), while that of Lukoil’s is 15.8 per cent. In December (up to December 25), Rosneft’s share was 63.4 per cent, while that of Lukoil was 4.5 per cent.
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The following graph shows their shares in Russian crude supply.
Kpler’s data show some of the other suppliers of Russian crude in December included RusExport, MorExport, Zarubezhneft and Redwood Global Supply FZE LLC.
Slow, steady rise
Sumit Ritolia, Kpler’s lead research analyst, foresees “a slow and steady increase” in January imports of Russian crude “on the back of new intermediaries” (supply chains) which have sprung up recently, reflecting resilience and also “attractive” discounts. The Russian crude isn’t sanctioned as such, but only the supply from two Russian oil majors, he notes.
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“As long as refiners stick to compliant, non-designated suppliers, purchases should continue”, he says, adding, “The workaround is simple and already well-tested: continue buying Russian crude, but through intermediaries. If the barrels are supplied via third-party trading entities, entities that can credibly show they are not Rosneft/Lukoil, then refiners can keep accessing discounted supply while limiting the appearance of sanctionable contact.”
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