India’s energy landscape has shifted dramatically in recent years, with Russian crude oil emerging as the nation’s primary import source. Once negligible, making up just 0.2% before the Russia-Ukraine conflict, Russian oil now accounts for roughly 40% of India’s crude intake—a staggering transformation shaped by geopolitical tensions and global sanctions.
From Cold War Ties to Modern Energy Dependencies
India’s longstanding relationship with Russia, rooted in Cold War-era diplomacy, plays a significant role in this development. While India championed a policy of non-alignment during the Cold War, it maintained close ties with the Soviet Union, especially through military cooperation and technology exchanges. Despite the Soviet Union’s collapse, Russia remains India’s top arms supplier, underpinning a strategic partnership that extends well beyond defense.
This historical alignment has influenced India’s recent energy choices. After Russia’s invasion of Ukraine in February 2022, many Western countries imposed sanctions, including oil import bans aimed at crippling Moscow’s economy. However, as traditional Russian customers curtailed their purchases, Russia turned to alternative buyers, including India and China, offering steep discounts.
According to data from Kpler, India’s crude oil imports from Russia reached a peak of 2.15 million barrels per day (bpd) in May 2023. By July 2024, Russian crude still constituted about 41% of India’s total oil imports, overtaking suppliers like Iraq (20%) and Saudi Arabia (11%). Currently, India imports around 1.75 to 1.78 million bpd of Russian oil, compared to approximately 900,000 bpd from Iraq and 700,000 bpd from Saudi Arabia.
One of the driving forces behind this surge is economic. With sanctions restricting Russia’s access to Western markets, Russia discounted its crude oil by as much as $40 below Brent benchmark prices at peak. Reuters data shows that between January and September 2023, India paid around $525.60 per metric ton for Russian crude, roughly $5 less per barrel than Iraqi oil. The Indian energy sector reportedly saved about $13 billion on oil imports over two fiscal years, according to ICRA, reflecting the financial incentives tied to these purchases.
However, India’s growing reliance on Russian oil has drawn international scrutiny. Former US President Donald Trump publicly criticized India’s approach, threatening a 25% tariff on Indian goods, coupled with “penalties” for India’s continued intake of Russian energy. Trump called India “Russia’s largest buyer of energy along with China” and suggested sanctions against all Russian oil buyers unless Moscow made a peace concession in Ukraine within 50 days.
India’s domestic energy demand underpins these complex decisions. The country consumes approximately 5.2 million barrels of oil daily, importing nearly 85% of this supply. Despite efforts such as the discovery of Bombay High in the 1970s, indigenous production remains insufficient to meet rising demand.
Throughout the Ukraine conflict, New Delhi has maintained a position of neutrality. Petroleum and Natural Gas Minister Hardeep Singh Puri has argued that Indian purchases helped stabilize global oil prices, preventing a dramatic spike. “Had India not bought Russian oil,” he noted in April 2024, “prices would have gone through the roof.”
Reflecting this trend, India’s crude oil import bill from Russia escalated from under $2.5 billion in the 2021-22 financial year to over $31 billion in 2022-23. The figure surged further to more than $140 billion in 2023-24, underscoring the scale of India’s pivot toward Russia amid a shifting global energy landscape.
As global powers navigate sanctions, diplomacy, and energy security, India’s evolving ties with Russian oil raise important questions about balancing geopolitical pressures and domestic needs. The long-term impact of this realignment on regional and international stability remains a subject to watch closely.
Leave a Reply