India’s Russian oil imports are set to reach a three-year low in December.
The month of December is bringing a big ‘twist’ in the story of which India was relying on Russian oil to meet its energy needs cheaply for the last few years. There is news that this month India’s Russian oil import is going to be at its lowest level in the last three years. Due to the stringent sanctions imposed by western countries, especially America and the European Union (EU), Indian refinery companies have now started pulling back and are looking for other options.
Fear of US sanctions
Due to the war between Russia and Ukraine, Western countries have tightened their grip on Moscow. The US has recently imposed new sanctions targeting Russia’s giant oil companies Rosneft and Lukoil. Buyers were given only time till November 21 to wrap up their business with these companies.
Its direct impact is visible on India. In fact, after American sanctions, banks have also increased scrutiny. No bank wants to get caught in the trap of restrictions, hence utmost care is being taken regarding payments. Industry sources say that due to this strictness, Indian government refinery companies are now taking steps with all their might.
Silence in December after the boom of November
Statistics are testifying to this change. While in November the refinery companies had made huge purchases in a bid to fill their stocks before the restrictions came into effect, the picture in December is completely different.
- November: According to Kpler data, about 18.7 lakh barrels per day (bpd) of Russian crude oil is expected to arrive in India this month.
- December: Sources estimate that this figure will fall to just 6 lakh to 6.5 lakh barrels per day.
This decline is also important because India had imported 1.65 lakh bpd of oil in October, which was 2 percent more than in September. But now the scenario has changed. The European Union has also set a new deadline of 21 January. After this, fuel will not be taken from refineries that have used Russian crude in the last 60 days.
What is the condition of which company?
The impact of this geopolitical pressure is clearly visible on the strategy of India’s big oil companies.
- Government companies: Companies like Mangalore Refinery (MRPL), Hindustan Petroleum (HPCL) and Mittal Energy have almost stopped purchasing Russian oil. Indian Oil (IOC) and Bharat Petroleum (BPCL) have made it clear that they will buy oil only from those entities which are not banned.
- Nayara Energy: Russia’s Rosneft has a stake in it, so this company is now processing exclusively Russian oil, as other suppliers have pulled out.
- Reliance Industries: Reliance, the operator of the world’s largest refining complex, has also changed its strategy. The company has said that it will process only those cargoes which were ‘pre-committed’ before October 22. Reliance has two refineries, one of which is specifically for the export market, so it has to strictly follow international regulations.
A new game of oil has started
An interesting aspect in this whole story is India’s trade with America. In October, the share of US oil in India’s oil imports reached the highest level since June 2024. Refinery companies have turned to American oil, taking advantage of the ‘arbitrage window’ (taking advantage of the difference in prices).
A diplomatic pressure is also working behind this. Washington has doubled the tariff on Indian imports to 50 percent, citing New Delhi’s purchase of Russian oil. In such a situation, there is now pressure on India to buy more energy from America.