India’s imports of Russian crude oil are set to exceed 1 million barrels per day (mmbbl/d) in December, defying earlier expectations of a sharp decline as refiners resume purchases from non-sanctioned suppliers offering steep discounts, according to trade and refining sources cited by Reuters.
Preliminary trade flow data from London Stock Exchange Group (LSEG) indicate that December arrivals could exceed 1.2 mmbbl/d, with one trade source suggesting imports may average as much as 1.5 mmbbl/d by the end of the month.
The resilience in imports comes despite earlier projections of a sharp drop. India, the world’s third-largest crude importer, shipped in 1.77 mmbbl/d of Russian oil in November, up 3.4% from October.
Analysts had anticipated a significant decline in flows due to US sanctions on two major Russian producers, Rosneft and Lukoil, which prompted some Indian refiners to slow or temporarily halt purchases.
However, December imports have been fueled by a rush among buyers to finalize deals ahead of Washington’s November 21 deadline for completing transactions with the sanctioned producers, with several such cargoes recently arriving at Indian ports, LSEG data shows.
Looking ahead, trade sources said volumes are likely to remain close to December levels in January as new non-sanctioned entities step in to supply Russian cargoes. State-run Indian Oil Corp is continuing to buy Russian crude in line with pre-sanctions volumes, according to two sources.
Bharat Petroleum has increased its January intake to at least six cargoes, up from two in December, while Hindustan Petroleum is in talks to secure shipments for January.
Not all refiners are maintaining Russian purchases, however. Reliance Industries and HPCL Mittal Energy have halted Russian oil purchases, while Mangalore Refinery and Petrochemicals is also set to skip Russian cargoes in January, the sources added.
Private refiner Nayara Energy, majority-owned by Russian firms including Rosneft, continues to buy only Russian oil following the withdrawal of other suppliers after it was sanctioned by the European Union and Britain.
The continued energy trade reflects broader diplomatic ties between the two nations. Energy ties between India and Russia have remained resilient despite increased Western pressure, following a recent meeting between Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, where both leaders reaffirmed their commitment to continued cooperation.
US President Donald Trump has warned that India could face tariffs over its continued purchases of Russian oil, after doubling import tariffs on Indian goods to 50%. Indian refiners are attracted by January prices that are discounted by approximately $6 per barrel to dated Brent, two or three times wider than in August, sources said.
