Kremlin Says Decline in India's Russian Oil Imports Likely to Be Temporary
Published: December 3, 2025 | Reading Time: 7 minutes
India, one of the world's largest oil importers, has increasingly turned to Russia for its energy needs, particularly since the geopolitical crisis in Ukraine began in 2022. With its energy demands rising and Western sanctions complicating Russia's ability to sell oil to Europe and the United States, Russia began to offer oil at heavily discounted prices, making it an attractive source for countries like India and China. However, recent reports have indicated a temporary dip in India's Russian oil imports, raising questions about the future of this energy relationship. The Kremlin has weighed in on the matter, suggesting that this decline is likely to be a temporary issue and that oil trade between Russia and India will continue to grow in the future.
The Background: India's Growing Dependence on Russian Oil
To understand the dynamics of this relationship, it is crucial to look at the broader context of India's energy needs and Russia's position in the global oil market. India, which is the third-largest oil importer globally, has long relied on countries in the Middle East—particularly Iraq, Saudi Arabia, and Iran—for its oil imports. However, this reliance has been challenged by several factors over the last decade: rising crude prices, the shifting balance of power in global geopolitics, and changing sanctions regimes, particularly those targeting Iran and, more recently, Russia.
In the wake of Russia's invasion of Ukraine in early 2022, the West imposed a series of sanctions on Russian energy exports. These sanctions aimed to cripple Russia's oil and gas revenues, but they also opened up an opportunity for countries like India and China to access Russian oil at discounted prices. India, with its ever-growing energy demand, quickly seized this opportunity, with the country's oil imports from Russia rising sharply throughout 2022 and 2023.
In fact, Russia became India's second-largest oil supplier, trailing only Iraq, and overtaking Saudi Arabia, which had historically been one of India's top suppliers. Indian refiners, including major players like Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Reliance Industries, ramped up their purchases of Russian Urals crude, which was available at a significant discount compared to oil from other sources.
The Decline in Russian Oil Imports: What Happened?
Despite the burgeoning energy ties between India and Russia, there has recently been a noticeable dip in the amount of Russian oil being imported by India. According to recent reports, the volume of Russian oil shipped to India fell by nearly 20% in the second half of 2023. This marks a departure from the sharp upward trajectory of Russian oil imports witnessed earlier in the year.
- Logistical and Supply Chain Challenges: While Russia has been eager to maintain and expand its oil exports to India, the logistical hurdles involved in moving oil from Russia to India are significant. The sanctions imposed on Russia have complicated the international shipping of Russian oil. There have been reports of a reduction in the number of ships willing to carry Russian crude due to the risk of sanctions, as well as a growing reliance on non-traditional shipping routes, which may have caused some delays.
- Refinery Constraints and Market Conditions: Indian refineries have been facing their own set of challenges. These include the technical challenges of refining Russian oil, which is of a different quality from the crude traditionally processed in Indian refineries. Moreover, some Indian refiners have been increasingly cautious about relying too heavily on Russian oil in the face of potential geopolitical risks, particularly with Western countries and the EU scrutinizing India's continued purchase of Russian energy.
- OPEC+ Production Cuts: Another key reason for the decline could be the supply constraints in global oil markets due to production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+). These cuts have affected the availability of oil on the international market, which could lead to refiners in India seeking other sources to meet their demands.
- Price Volatility: Oil prices have been highly volatile in recent months due to fluctuating supply and demand dynamics. The price of Russian crude has also been impacted by the "price cap" mechanism imposed by the G7 nations, which restricts the price at which Russian oil can be sold. If global oil prices rise too much, or if Russia is unable to sell oil at attractive prices, Indian refiners may look to diversify their sources.
The Kremlin's Perspective: A Temporary Setback
Despite this temporary decline in oil imports, the Kremlin has expressed optimism about the future of its energy relationship with India. Russian officials have suggested that the drop in exports is not a permanent trend but rather a "temporary setback" caused by logistical and market adjustments.
Russian Deputy Prime Minister Alexander Novak, speaking to the press, assured that Russia is committed to maintaining and increasing its oil supply to India. He emphasized that while there might be fluctuations in the volume of oil exports due to temporary factors, the strategic nature of the energy relationship between Russia and India remains unchanged.
One of the key points that Novak highlighted was the growing demand for Russian oil in Asia, particularly in India and China, which continue to be vital markets for Russia in the wake of Western sanctions. According to Russian estimates, Asian markets now account for over 70% of Russia's oil exports, with India being a key part of that shift.
The Kremlin's perspective is grounded in the belief that India's long-term energy needs will continue to drive demand for Russian oil. With geopolitical tensions increasing in the West and energy security becoming an ever-more important issue for countries like India, the diversification of energy sources—including the continued reliance on Russian oil—remains an attractive proposition.
India's Position: Balancing Geopolitical and Energy Needs
For India, the question of continuing to import Russian oil is a delicate balancing act. On the one hand, there are clear economic incentives: Russian oil has been available at a discount, which has helped India manage its growing energy needs while keeping fuel prices relatively stable. On the other hand, India faces significant pressure from the West to scale back its reliance on Russian oil, given the ongoing war in Ukraine and the international push to isolate Russia.
India's foreign policy has traditionally been non-aligned, and the country has sought to maintain strong relations with all major powers, including the United States, the European Union, and Russia. This diplomatic balancing act has made it possible for India to continue its oil trade with Russia without facing significant political fallout. Indian officials have repeatedly stated that their energy decisions are driven by national interest and the need to ensure energy security for their population.
At the same time, India has also been exploring alternative sources of oil. For instance, the country has sought to diversify its energy imports by increasing purchases from the Middle East and West Africa, while also exploring new energy partnerships with the United States and other countries. The push for renewable energy has also been gaining momentum in India, with the government setting ambitious targets for clean energy adoption.
What Lies Ahead: Prospects for Russian Oil Exports to India
Despite the recent dip in Russian oil imports, the prospects for continued energy cooperation between Russia and India remain strong in the medium to long term. Several factors suggest that the decline in imports may indeed be temporary:
- India's Growing Energy Demand: As India's economy continues to grow, its energy needs are expected to rise. With limited domestic oil production, the country will likely remain dependent on imports for the foreseeable future. Russia, with its vast oil reserves, remains a key player in meeting these needs.
- Ongoing Discounts on Russian Oil: Despite the challenges Russia faces in the global market, the discounted prices of Russian oil will likely continue to make it an attractive source for countries like India, especially as global oil prices remain volatile.
- Geopolitical Realities: The international sanctions on Russia are unlikely to ease significantly in the short term. This creates an opportunity for countries like India, which are not part of the Western sanctions regime, to continue benefiting from discounted Russian oil.
- Investment in Infrastructure: Both Russia and India are investing in the infrastructure needed to facilitate the smooth delivery of oil. This includes the development of new shipping routes, the use of alternate payment mechanisms, and improvements in refining capacity to handle Russian crude.
Conclusion: A Temporary Setback, Not a Permanent Change
The recent decline in India's Russian oil imports is unlikely to signify a permanent shift in energy dynamics between the two countries. While logistical, market, and geopolitical factors have contributed to this temporary dip, the long-term energy relationship between Russia and India remains strong. Both nations have a shared interest in continuing and expanding their trade ties, particularly in the energy sector.
As India seeks to ensure its energy security in an increasingly unstable global environment, Russian oil will continue to play a vital role in meeting the country's growing demand. The Kremlin's reassurances, coupled with the growing geopolitical and economic ties between Russia and India, suggest that the decline in oil imports is merely a temporary phase, and the bilateral energy trade will continue to flourish in the coming years.
Comments