Russian Oil Flows: India Defies Sanctions as Imports Surge
The geopolitical valve is tightening around Moscow’s energy exports. However, India’s appetite for discounted Russian crude oil shows no signs of waning.
A new wave of sanctions from the United States is targeting major Russian producers like Rosneft and Lukoil. But India’s crude imports from Russia are on track to climb to a six-month high in Dec 2025.
As per the data compiled by commodity analysts Kpler, crude arrivals in India are expected to rise to 1.85 mn bpd (barrels per day) this month. The figure is up from 1.83 mn bpd in Nov 2025.
This has marked the third consecutive month of rising imports. It is underscoring the GoI’s (Government of India’s) strategic resolve to prioritise energy security and economic interest over diplomatic pressure.
But investors need to be aware of the considerable structural shift beneath the headline, ‘Who is buying this oil?’ The aggregate volume is robust. However, the mix of buyers has transitioned considerably.
Private giant Reliance Industries has pulled back from importing Russian oil, while state-owned refiners and Russian-backed Nayara Energy have stepped on the gas. Thus, there are two important questions for the market. Can India sustain this high-wire balancing act? Or, will the widening net of secondary sanctions eventually choke off these flows?
Reliance Retreats, Nayara Doubles Down
RIL (Reliance Industries Ltd) is operating the world's largest refining complex in Jamnagar. It has made a decisive move to de-risk its portfolio. In Nov 2025, the company had announced it had ceased importing Russian oil for its export-only (SEZ) refinery, effective Nov 20.
Starting Dec 1, all products exported from this facility will be derived exclusively from non-Russian crude.
This shift is a direct response to European Union sanctions that bar the import of fuels produced from Russian oil. Reliance, a major exporter of diesel and jet fuel to Europe and the US, cannot afford to taint its supply chain.
In contrast, Nayara Energy, which is 49.13% owned by Rosneft, has become the main conduit (channel for conveying) for Russian barrels. Nayara Energy is expected to offload about 658,000 bpd at its Vadinar port in Dec 2025. This volume considerably exceeds its refinery’s processing capacity of 405,000 bpd.
Thus, Nayara is aggressively stockpiling crude. It is betting that sanctions might ease or that it can find domestic outlets for its products.
The Public Sector Shield
RIL is stepping back. Also, India's state-owned refiners, such as Indian Oil Corp, Bharat Petroleum, and Hindustan Petroleum, have effectively filled the void. Collectively, these public sector units are accounting for ~904,000 bpd of Russian imports in Dec 2025.
Private players with deep exposure to Western financial systems and export markets are exercising caution. However, state refiners, which primarily cater to the domestic market, are less vulnerable to Western secondary sanctions. They are leveraging the "sovereign shield" to continue procuring discounted oil to keep domestic fuel prices stable.
Russian crude is continuing to trade at a discount to Brent. This provides a cushion against global oil price volatility, helps manage the current account deficit, and supports inflation control.
The "Shadow Fleet" and Alternative Payment Rails
The mechanics of the trade have evolved to manage the sanctions. The traditional Western shipping and insurance services are largely off-limits due to the G7 (Group of Seven Countries) price cap. However, Russian oil is increasingly moving on a "shadow fleet" of older tankers operating outside Western jurisdiction.
Traders are using currencies like the UAE dirham and even the Chinese yuan to settle trades. Thus, they are bypassing the US financial system.
India's strategy is capitalising on a bifurcated oil market where Russian barrels are toxic to the West but essential to the East.
So, as long as the discount continues and delivery infrastructure remains intact, India is likely to remain a major customer for Moscow despite sanctions.
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