From Sanctions to Savings: India-Russia Oil Diplomacy

When Russia invaded Ukraine in February 2022, few would have predicted that within three years Moscow would become India’s largest oil supplier. Before the war, Russian crude accounted for a negligible 0.2% of India’s imports. Fast forward to 2025, the figure hovers around 35%, equivalent to roughly 1.75 million barrels per day. That’s not just a pivot; it’s a full-on cartwheel in global energy politics. The reason? Massive discounts. Enabled by price cuts and settlements in rupees, the surge has saved New Delhi billions of dollars and secured energy supplies during global turbulence.

Western sanctions cut Russia out of traditional markets, forcing it to redirect exports eastward. India seized the opportunity. Cargoes often arrived at $5 to $30 per barrel below market price, giving Indian refiners a competitive advantage and boosting margins. At one point, the gap was so wide that Russian crude became a no-brainer — but those days are fading. According to India’s Ministry of Commerce, the discount has now shrunk to just $2.5–4 per barrel. Since early 2022, India has spent about ₹13.39 lakh crore ($132 billion) on Russian oil, equal to nearly 20% of Russia’s total crude revenue in that period. Reliance Industries’ Jamnagar refinery and Nayara Energy’s Vadinar plant illustrate the scale of the shift: Russian oil now makes up almost 50% of Jamnagar’s intake and roughly 66% of Vadinar’s. The shrinking price advantage explains why refiners are once again eyeing Iraq, the UAE, and Saudi Arabia (together already supplying ~45–50% of India’s oil), and even the U.S. through a new energy trade deal. Russia is still in play, but the bargain is losing steam.

This strategy has drawn scrutiny from Washington and Brussels. The G7’s price cap on Russian crude and the threat of secondary sanctions highlight the pressure New Delhi faces. Yet India has consistently defended its purchases as a pragmatic choice. Local policymakers argue that cutting off Russian crude would raise India’s fuel bill by $9 billion in FY26 and $12 billion in FY27. Energy security for a population of 1.4 billion, they say, cannot be subordinated to geopolitical rivalries. Even as it deepens defense and technology partnerships with the United States and Europe, New Delhi signals it will not sacrifice affordability and security at home.

Complicating the picture is the role of China. Moscow still leans on Beijing more than anyone, which risks turning Russia into China’s understudy. For India, buying Russian crude serves a dual purpose: lowering costs and keeping Moscow as a geopolitical counterweight. The balance is delicate. India’s own disputes with Beijing remain unresolved, yet Prime Minister Narendra Modi’s upcoming visit to China hints at possible recalibration. Even a small diplomatic edge gained through energy diplomacy, especially with Putin rumored to visit Delhi soon, could turn the idea of a Russia-India-China triangle into a tangible strategic play. Moscow, with leverage over both capitals, could act as a quiet mediator.

With BRICS expanding, payment systems shifting, and energy emerging as the glue of new alliances, the whispers of an India-Russia-China triangle no longer sound far-fetched. But obstacles remain significant. India’s participation in the Quad alongside the U.S. and Japan, as well as its border tensions with China, limit how far cooperation can go. Still, the symbolism of Modi in Beijing and Putin in Delhi within months could shake up Asia’s balance of power.

Ultimately, India’s oil diplomacy with Russia is about far more than barrels and discounts. It reflects energy as geopolitical currency in a shifting world order. By maintaining ties with Moscow, balancing relations with Beijing, and managing pressure from the West, New Delhi is staking its claim in a multipolar world. The coming months — marked by Modi’s outreach to China and a possible Putin trip to India — will test whether this balancing act can be sustained or whether energy diplomacy will force harder choices.

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