US sanctions unlikely to deter Indian appetite for Russian oil, imports may pick up in January: Kpler 

As such, Russian barrels continue to remain very attractive for Indian buyers as the spread with competing Middle Eastern grades now reaches $8-10/bbl.

• India to import 1.3M barrels/day of Russian crude in Jan despite US tariffs
• Russian crude remains competitive for Indian refiners, aided by intermediaries
• India's crude import bill may rise by $3-4 Billion if Russian oil access tightens

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India’s import of Russian crude oil is expected to stay resilient in January despite the US’s proposed “Russia sanctions Bill” that imposes 500% tariffs on countries buying crude oil from Russia, according to global real time data and analytics provider Kpler.

The country is likely to import 1.3 million barrels per day of crude oil from Russia in January, Kpler told Moneycontrol.

“If the proposed 500% US tariffs tied to Russian oil buying become credible, they would fundamentally change procurement behaviour, not overnight shortages, but a shift in risk calculus,” said Sumit Ritolia, Lead Research Analyst for Refining & Modeling at Kpler. “In January 2026, we see Russian crude imports around 1.1-1.3 mbd,” he added.

Kpler notes that beyond oil, such tariffs would primarily hit India’s exports to the US, creating uncertainty for trade negotiations and raising financing friction. This could even potentially push up India’s import bill and inflation pressures.

The country has ample physical supply options including Middle Eastern grades that would replace the bulk quickly, supplemented by US and West African barrels. However, analysts note that the real cost would be losing discounted crude resulting in higher average prices and a stronger focus on term contracts, diversification, and refinery optimization.

As per Kpler, India’s annual crude import bill could rise by $3–4 billion, assuming a conservative $5/bbl differential on 1.8 mbd of displaced volumes if Russian crude becomes inaccessible due to escalating sanctions or penalties.

Losing this pricing cushion would not only inflate input costs but also strain fiscal balances if the government intervenes to prevent retail fuel inflation.

The country’s crude oil import bill stood at $80.9 billion during April-November of FY26, as per data from the government’s Petroleum Planning and Analysis Cell.

India’s Russian crude imports fell sharply in December 2025, dropping to an estimated 1.2 mbd from 1.84 mbd in November, following new US sanctions on Russia’s major oil companies Rosneft and Lukoil.

While this marks the lowest intake since late 2022, the decline reflects a short-term procurement adjustment rather than a structural shift, as per Kpler.

“Russian barrels remain economically competitive and well-suited to India’s refining system, with volumes expected to recover from January as trade shifts to non-designated intermediaries. Absent broader secondary sanctions, Russian crude is likely to remain structurally embedded in India’s slate,” Ritolia said.

Russian crude continues to find its way into India through an expanding network of intermediaries, traders, and logistical workarounds.

While direct purchases from Rosneft and Lukoil have softened owing to US sanctions, alternative sellers including Tatneft, Redwood Global Supply, Rusexport, Morexport, and Alghaf Marine are increasingly stepping in to fill the commercial gap, Kpler said.

For Indian refiners, Russian barrels continue to remain competitive and marketable.  “Russian barrel imports are therefore expected to gradually re-normalise from January, albeit through more intermediated and less transparent structures, with the barrels themselves remaining competitive and marketable,” Ritolia said.

As per data from Kpler, Russian Urals differentials against Oman/Dubai on a Delivered ex-ship (DES) West Coast India basis have stabilised at a discount of around $7 per barrel since early December, down roughly $5/bbl from pre-sanctions levels.

Ritolia noted that this adjustment also reflects a broader softening in the Asian medium sour market, with competing Middle Eastern grades such as Arab Light and Basrah Medium weakening by $1.50-2.00/bbl over the same period.

As such, Russian barrels continue to remain very attractive for Indian buyers as the spread with competing Middle Eastern grades now reaches $8-10/bbl.

“The financial gain is substantial for refiners willing to take the risk. India’s high-complexity refineries can replace Russian barrels by sourcing additional barrels from the Middle East, West Africa, the Americas, and North America, but often at the cost of margin compression, leaving Russian crude competitive on both price and refinery fit,” Ritolia said.

Looking into 2026, India’s crude import strategy is expected to remain pragmatic and highly diversified, balancing affordability, security of supply, and geopolitical risk, analysts note.

Middle Eastern suppliers including Saudi Arabia, Iraq, the UAE, and Kuwait will continue to anchor India’s crude slate, Kpler notes, while incremental volumes from the US and select Atlantic Basin producers will provide India flexibility.

“On the demand side, new capacity additions—including the Rajasthan refinery start-up in H1 2026 and expansions at Panipat, NRL, and other complexes are set to structurally increase India’s crude import requirements,” Kpler noted.

While Russia remains central to India’s crude slate, Middle Eastern, Latin American, and US barrels will continue to act as diversification buffers rather than full replacements, with Russian crude likely to persist through increasingly indirect channels as long as broader secondary sanctions are avoided, Ritolia said.