As discounts, subdued prices make Moscow’s crude sanction-proof, India’s Russian oil imports touch 10-month high in May

By | May 30, 2025

Record High Imports Driven by Price Advantage

In May, India imported approximately 1.9 million barrels per day (bpd) of crude oil from Russia—the highest level since July 2024. This accounted for nearly 40% of India’s total oil imports, reaffirming Russia’s position as India’s top supplier for the month.

The primary driver: steep discounts. Russian crude grades like Urals and Sokol were sold at $8–$12 per barrel cheaper than Brent, significantly undercutting supplies from the Middle East, Africa, and the U.S.

“Refiners are prioritizing economics. Russian crude remains the most cost-effective, even after factoring in shipping and payment hurdles,” said a senior Indian oil trader.

Sanctions Loopholes and Alternative Trade Networks

Despite sanctions imposed by the U.S., EU, and G7—including the $60-per-barrel price cap—Russia continues exporting oil to non-aligned countries like India using alternative networks.

Moscow relies on:

  • Shadow tankers with obscure ownership,
  • Non-Western insurance firms, and
  • Yuan- or rupee-based transactions that bypass SWIFT.

This has created an alternative oil supply ecosystem, often referred to as the “gray trade” or “shadow fleet,” which allows Russian oil to reach Indian refiners outside the purview of Western oversight.

India’s Strategic Defense: Energy Security First

India has consistently pushed back against criticism from the West for its Russian oil imports. Officials maintain that energy affordability and access are national priorities.

“We don’t politicize oil. Our focus is on ensuring supplies at the lowest possible cost,”
— S. Jaishankar, Indian External Affairs Minister

With a growing economy and a population of 1.4 billion, India argues that affordable crude is essential to sustain its economic momentum and keep domestic inflation in check.

Wider Impact on Global Oil Trade

India’s increased appetite for Russian oil is reshaping global energy flows:

  • Middle Eastern suppliers (like Saudi Arabia and Iraq) have redirected exports toward Europe, filling gaps left by Russian crude.
  • Russia, in turn, has shifted eastward, solidifying energy ties with India and China.

“Global oil markets are undergoing a transformation. Geography matters less now than pricing and pragmatism,” said Vandana Hari, energy market analyst and founder of Vanda Insights.

Refined Products and Global Re-Exports

Interestingly, much of the Russian crude imported into India is refined into gasoline, diesel, and aviation fuel, some of which is then exported to Western countries—including those that sanctioned Russian oil.

This creates a legal gray area: while direct imports of Russian crude are sanctioned, refined products made from it often are not.

As a result, Indian refiners benefit both ways:

  • They buy cheap Russian oil,
  • Process it into high-value fuels, and
  • Sell those fuels at international prices.

Looking Ahead: Risks and Resilience

While the current strategy is economically advantageous, Indian oil companies remain cautious about:

  • Secondary sanctions from the U.S. targeting financial institutions or tankers involved in Russia-related trade,
  • Shipping insurance complications, and
  • Volatility in global oil prices.

Still, analysts believe that as long as discounts remain deep and no hard penalties are imposed on buyers like India, Russian crude will continue to be a mainstay in India’s energy mix.

Conclusion

Russia’s oil exports have proven remarkably resilient amid sanctions, thanks in large part to countries like India stepping in as major buyers. For India, the priority remains clear: economic pragmatism over political alignment.

With Russian barrels still the cheapest option, and global demand dynamics in flux, India is likely to maintain—if not expand—its energy partnership with Moscow in the months ahead.