Western sanctions are changing India's oil trade, reducing its dependence on discounted Russian oil and redirecting energy flows towards the United States and the United Arab Emirates, according to a report by Rubix Data Sciences, UNN reports with reference to mint.
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India's oil imports from Russia reportedly decreased by 17.8% between January and October 2025 compared to the same period last year, as tighter EU restrictions and expanded US secondary sanctions increased compliance risks for Indian refineries, the report said.
"This shift marks a departure from the post-invasion period in Ukraine, when India became one of the largest buyers of Russian oil after Western countries imposed sanctions against Moscow," the publication writes. At that time, significant discounts on Russian oil offered Indian refineries a cost advantage, especially for export-oriented enterprises. However, this strategy became increasingly difficult to maintain in 2025 amid increased control, the publication notes.
Rubix noted that pressure intensified in mid-2025 when the EU lowered the price cap on seaborne Russian oil to limit Moscow's oil revenues. This was followed by broader US secondary sanctions, which tightened control over global energy trade.
In October, the US Treasury Department's Office of Foreign Assets Control (OFAC) imposed sanctions against Russian oil giants Rosneft and Lukoil, further complicating purchases for Indian importers, the publication writes. It is noted that together these two companies accounted for almost 60% of Russian oil exports to India in the 2025 fiscal year, which amounted to about 88 million tons, according to the report.
"These growing risks of non-compliance have forced Indian refineries to reduce the volume of Russian barrels, especially for export-related operations," Rubix said, adding that "imports from Russia are expected to further decrease from December 2025."
With reduced dependence on Russian oil, India, as indicated, has shifted to what the report describes as "clean" barrels, oil supplies that can be refined and exported without violating Western restrictions.
"Crude oil imports from the United States increased by 83.3%, while purchases from the UAE increased by 8.7% during January-October 2025," the publication writes.
"This shift highlights how trade considerations, not just price, are now shaping India's energy sourcing decisions," the report says.
The consequences of the sanctions, it is noted, were more noticeable in exports. Shipments of petroleum products to India's five main destinations: the Netherlands, the UAE, Singapore, the US, and Australia, sharply decreased during this period.
These markets accounted for 51% of India's petroleum product exports between January and October 2025. The decline occurred after the introduction of EU rules that restricted the import of fuel from Russian crude oil, even if it is processed in third countries such as India.
Western buyers have become increasingly cautious about purchasing Indian fuel products that can be traced back to Russian-origin oil, amid increased scrutiny, Rubix noted.
To compensate for losses in traditional destinations, Indian exporters turned to smaller and non-Western markets. "China's share of India's oil exports doubled from 2% to 4%, while Oman's share increased from 2% to 4%, and South Korea's share from 1% to 2%," the publication writes.
Rubix concluded that "while Russian oil remains part of India's energy balance, its dominance is gradually weakening as sanctions compliance, export access, and geopolitical uncertainty reshape trade flows."
India's largest importer resumes Russian oil purchases - Bloomberg24.12.25, 17:48 • [views_3246]