India's imports of Russian crude oil have shown remarkable staying power despite intensifying US sanctions and diplomatic pressure, with industry experts now expecting significant purchases to continue well into 2026. The resilience of these trade flows highlights India's pragmatic approach to energy security amid a complex geopolitical landscape.

Russian Oil Flows Stabilize Despite Pressure

Russian crude imports to India have stabilized after months of disruption caused by US sanctions and tariffs. The flow patterns tell a compelling story of market adaptation:

Indian Oil Minister Hardeep Puri acknowledged the challenging market environment at a high-profile energy gathering in Goa, stating that the world has "become more challenging, in spite of the fact there is no shortage of energy globally." He emphasized that market dynamics remain the determining factor for India's oil purchasing decisions.

Major Refiners Maintain Russian Crude Purchases

Despite US pressure, major Indian oil companies continue to engage with Russian suppliers. The attractive pricing of benchmark Urals crude, which has declined due to US sanctions on major producers, makes Russian purchases difficult to resist for cost-conscious refiners.

Key developments among Indian oil companies include:

• Reliance Industries Ltd. has placed new orders for non-sanctioned Russian cargoes, marking a shift from its previously conservative approach
• Indian Oil Corp. has expanded its spot market purchases while continuing Russian crude imports
• Bharat Petroleum Corp. continues buying Russian oil while simultaneously seeking long-term Middle Eastern supply agreements
• Nayara Energy Ltd., despite being sanctioned, maintains its Russian crude purchasing activities

Diversification Efforts Alongside Russian Imports

India has actively worked to rebalance its crude oil sourcing, moving away from the heavy reliance on Russian supplies that characterized much of the previous year. The country has sought to return to traditional Middle Eastern suppliers while maintaining access to discounted Russian crude.

Bharat Petroleum Corp. has issued tenders for long-term Middle Eastern crude volumes, including:

• Abu Dhabi's Murban crude
• Iraqi Basrah crude
• Oman crude

According to Minister Puri, India now sources oil from 41 different suppliers, up from 27 a few years ago, reflecting the country's commitment to supply diversification.

Market Outlook and Future Considerations

Analysts expect India to maintain what Naveen Das of Kpler Ltd. describes as a "healthy baseload of Russian crude" while expanding relationships with Middle Eastern suppliers and exploring opportunities with non-sanctioned Venezuelan barrels. The approach reflects India's strategy of securing the best prices and margins for its refiners.

Several factors could influence future Russian oil import levels:

• US-India Trade Deal: A potential trade agreement between India and the United States could prompt New Delhi to adopt a more conservative stance on Russian oil imports
• Refining Capacity Expansion: Government forecasts indicate India's refining capacity could rise to 309.50 million tons annually by 2030 from 258 million tons currently
• Global Market Dynamics: The current global oil oversupply provides India with substantial optionality in its purchasing decisions

As Arne Lohmann Rasmussen of A/S Global Risk Management noted, "We know that oil will always find a way," emphasizing that while US sanctions and EU bans are impacting imports, India is unlikely to completely abandon Russian oil imports. The combination of economic pragmatism and energy security considerations suggests that Russian crude will remain part of India's energy mix for the foreseeable future.

Oil prices maintained their upward momentum on Monday, extending gains from the previous session's 2% climb as escalating tensions between the U.S. and Iran continued to unsettle global energy markets. The geopolitical uncertainty overshadowed positive supply news from Kazakhstan, where the main export pipeline resumed full operations after completing scheduled maintenance.

Current Price Movements

Crude oil benchmarks showed modest but consistent gains during early trading hours. Market performance reflected ongoing supply disruption concerns despite improved pipeline capacity from key producing regions.

Both benchmarks closed Friday at their highest levels since January 14, reflecting sustained market optimism despite ongoing geopolitical risks.

Geopolitical Tensions Escalate

U.S.-Iran relations reached new levels of tension as military assets moved toward the Middle East region. President Trump's recent statements regarding an "armada" heading toward Iran, while expressing hope to avoid military action, have significantly impacted market sentiment. The President warned Tehran against killing protesters or restarting its nuclear program.

Iranian officials responded with strong rhetoric, with a senior official stating Iran would treat any attack "as an all-out war against us." This exchange of warnings has created substantial uncertainty in global energy markets.

"President Trump's declaration of a U.S. armada sailing toward Iran has reignited supply disruption fears, adding a risk premium to crude prices and supported risk aversion flows more broadly this morning," noted IG market analyst Tony Sycamore.

Supply Infrastructure Updates

Kazakhstan provided positive supply news as the Caspian Pipeline Consortium announced the return to full loading capacity at its Black Sea terminal on Sunday. The restoration followed completion of maintenance work at one of three mooring points, eliminating a temporary supply constraint.

Weather-Related Production Impacts

U.S. domestic production faced challenges from severe winter weather conditions that began affecting operations on Friday. The winter storm created significant disruptions across multiple producing regions, contributing to supply tightness concerns.

JPMorgan analysts reported substantial production losses, stating: "Oil production has also been affected by severe winter weather, with losses of around 250,000 bpd (barrels per day), including declines in the Bakken, Oklahoma, and parts of Texas."

The weather-related production cuts coincided with spikes in spot power prices as the winter storm swept across the country, affecting both crude oil and natural gas operations. These domestic supply disruptions added another layer of support to crude prices already elevated by geopolitical tensions.