India Diversifies Oil Imports Amid US Sanctions on Russia
India shifted energy procurement toward the US and Middle East after the United States sanctioned Russian oil majors Rosneft and Lukoil to pressure Moscow over the Ukraine war.
The Federal government of the United States, in coordination with the UK and EU, imposed sweeping sanctions on Russia's largest oil producers, Rosneft and Lukoil, on October 22, 2025. The measures, aimed at forcing a ceasefire in Ukraine, barred U.S. businesses from transactions with these firms and established a compliance deadline of November 21. To further pressure New Delhi, the Trump administration imposed punitive tariffs on Indian goods, which reached 50% in response to India's continued Russian oil purchases.
India's response was divided between state and private sectors. Reliance Industries, Mangalore Refinery and Petrochemicals, and HPCL-Mittal Energy halted imports from the sanctioned majors to avoid secondary sanctions and preserve European market access. Conversely, the state-run Indian Oil Corporation maintained it would continue purchasing Russian crude from non-sanctioned entities. This led to a volatile import pattern: Russian oil flows surged to a five-month high of 1.855 million barrels per day in November as refiners stockpiled before the deadline, followed by a sharp plunge toward 600,000 barrels per day in December.
To offset these losses, India aggressively diversified its supply chain, chartering Middle Eastern tankers and increasing U.S. crude imports. India also signed its first annual contract for U.S. liquefied petroleum gas to meet 10% of its needs. Despite the trade friction, President Donald Trump acknowledged in November that India had substantially reduced its Russian oil purchases and pledged to bring tariffs down as bilateral trade negotiations continue.
