India Turns Away From Costly Russian Oil as Middle Eastern Supplies Recover
India’s oil market is showing a notable shift as refiners reduce purchases of Russian crude and increasingly look toward supplies from the Middle East. The change is being driven largely by economics: Russian oil, which had previously been attractive because of steep discounts, has become considerably more expensive, while Gulf supplies are becoming easier to access again.
Indian refiners have reduced purchases of Russian crude scheduled for November delivery. The move comes as competition from China pushes up prices for Russia’s flagship Urals crude and shipping conditions in the Middle East improve.
Russian Oil Loses Its Price Advantage
Russian crude became an important part of India’s oil basket after Western sanctions following Russia’s invasion of Ukraine in 2022 redirected Russian barrels away from traditional European buyers.
For Indian refiners, the attraction was straightforward: Russian crude was available at substantial discounts compared with competing grades. That price advantage helped refiners manage their crude costs while maintaining access to large volumes.
The situation has now changed.
Urals crude loaded in the Baltic is reportedly being offered at a premium of more than $10 a barrel over Dated Brent. That is a significant reversal from the deep discounts that initially encouraged Indian refiners to increase purchases of Russian oil.
With Russian crude now priced much closer to Middle Eastern alternatives, refiners have less financial incentive to accept the additional transportation and logistical complexities associated with some Russian shipments.
China Is Increasing Competition for Russian Barrels
Another important factor is stronger Chinese demand.
China and India remain among the largest buyers of Russian crude, but Chinese purchases have increased in recent months. According to Kpler analysis cited in the report, higher Chinese imports are adding competition for Russian barrels that might otherwise have been available to Indian refiners.
The change is partly connected to China's reduced access to Iranian crude, increasing the importance of Russian supplies for some Chinese buyers.
This creates a different competitive environment for Indian refiners. Instead of being able to secure Russian crude at exceptionally attractive prices, they now have to compete with another major Asian buyer.
That makes alternative sources, particularly Middle Eastern crude, increasingly appealing.
Middle Eastern Oil Is Becoming More Competitive
At the same time, supplies from the Middle East are recovering.
More tankers are once again navigating routes through the Strait of Hormuz, despite continuing security risks in the region. Middle Eastern oil flows have recovered to roughly 80% of pre-war levels, according to comments cited from Shell CEO Wael Sawan.
The recovery is important for India because Gulf crude has a major logistical advantage.
Middle Eastern supplies generally require shorter voyages to Indian refineries than Russian shipments travelling from ports such as those in the Baltic region. Shorter distances can translate into lower transportation costs and quicker delivery, particularly when tanker freight rates are elevated.
This means the comparison for Indian refiners is no longer simply about the headline price of crude. The overall delivered cost—including freight, shipping time and logistical risks—also matters.
India's Russian Oil Share Has Fallen
The shift can already be seen in India's import mix.
Russia's share of India's crude imports declined to around 35% in September from as high as 56% in July, according to Kpler data cited by Bloomberg. Russian shipments averaged only about 310,000 barrels per day during the four weeks through October 4, according to tanker-tracking data compiled by Bloomberg. That was the lowest level since March 2022.
Other recent data also point to a changing crude basket. India's Russian crude imports declined in September while West Asian supplies increased substantially as shipping routes recovered.
However, this does not necessarily mean India is abandoning Russian oil altogether.
India has repeatedly demonstrated that refiners can change their crude mix according to price, availability and commercial conditions. The latest movement therefore appears more like a response to changing economics than a permanent decision to exclude Russian supplies.
US Pressure Is Only One Part of the Story
India's Russian oil purchases have also faced increasing geopolitical scrutiny.
US sanctions and the possibility of punitive tariffs have created additional uncertainty for companies dealing with Russian crude. However, the latest reduction in purchases appears to have a strong commercial explanation as well.
The available information indicates that Indian refiners were already responding to higher Russian prices while alternative Middle Eastern supplies became more accessible.
This distinction is important. India's crude procurement decisions are influenced by several factors simultaneously: price, freight costs, availability, refinery requirements, sanctions exposure and geopolitical risk.
The latest shift demonstrates how quickly commercial calculations can change when those factors move in opposite directions.
What the Shift Means for India's Oil Market
For India, greater access to Middle Eastern crude provides another source of supply at a time when global energy markets remain uncertain.
But increased demand from India could also intensify competition for Gulf barrels. Asian refiners are competing for supplies as they prepare for the final months of the year, potentially putting pressure on regional crude prices if demand remains strong.
India is also not limiting itself to one alternative. Kpler's analysis indicates that the country has been diversifying its crude basket, with more supplies coming from the Middle East and the Americas.
That diversification can provide refiners with greater flexibility when prices or geopolitical conditions change.
The Bigger Picture
The latest development highlights one of the biggest lessons from India's experience with Russian crude: discounts matter, but delivered economics matter more.
Russian oil became highly attractive when it was significantly cheaper than competing grades. As that discount has disappeared and Chinese competition has increased, Middle Eastern crude has become comparatively more attractive—particularly as Gulf supply routes recover.
For Indian refiners, the immediate priority remains securing reliable crude at competitive delivered prices. Russian oil is still an important part of the global market and India's energy relationship with Moscow remains significant, but the latest import data show that refiners are willing to adjust their purchasing decisions when market economics change.
The coming months will therefore be important. If Russian crude becomes cheaper again, Indian buyers could regain interest. If Middle Eastern supplies remain readily available and competitively priced, Gulf producers could capture a larger share of India's crude import basket.
In other words, India's oil strategy is increasingly being shaped by a combination of price, logistics, availability and geopolitical risk, rather than loyalty to any single supplier.
