What Happened
- Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Reliance Industries Ltd (RIL) have stopped accepting offers from traders for Russian crude oil loading in March and April 2026.
- The decision aligns with the India-US interim trade framework announced on February 7, 2026, under which the US removed a 25% additional tariff on Indian goods after India reportedly committed to stop purchasing Russian oil directly or indirectly.
- India targets reducing Russian crude imports to below 1 million barrels per day (bpd) by March, eventually reaching 500,000-600,000 bpd, down from 1.7 million bpd in 2024.
- Nayara Energy, in which Russia's Rosneft holds nearly 49% equity, is expected to retain importing rights as an exception, partly because it faces a month-long maintenance shutdown in April.
- The Indian government has not formally announced a halt to Russian oil imports. The Ministry of External Affairs stated that India's energy policy focuses on "diversifying energy sourcing in keeping with objective market conditions."
Static Topic Bridges
India's Oil Refining Sector: Structure and Key Players
India has the fourth-largest refining capacity globally, with 23 refineries having a combined capacity of approximately 256 million tonnes per annum (MTPA) as of 2024-25. The sector comprises public sector undertakings (PSUs), joint ventures, and private companies. Indian Oil Corporation (IOC), the largest PSU refiner, operates 11 of these refineries. Refinery operations are regulated by the Petroleum and Natural Gas Regulatory Board (PNGRB), established under the PNGRB Act, 2006, while upstream exploration is governed by the Hydrocarbon Exploration and Licensing Policy (HELP, 2016) and the Open Acreage Licensing Policy (OALP).
- India's total refining capacity: approximately 256 MTPA (4th globally after US, China, and Russia)
- IOC: India's largest refiner (11 refineries, approximately 80.7 MTPA capacity); also the largest commercial entity in India by revenue
- BPCL: 4 refineries (approximately 38.3 MTPA); government holds approximately 52.98% stake
- HPCL: 4 refineries (approximately 25.2 MTPA); subsidiary of ONGC since 2018
- Reliance Industries: operates the Jamnagar Refinery Complex (Gujarat), the world's largest single-location refinery complex (approximately 68.2 MTPA combined capacity for the DTA refinery and SEZ refinery)
- Nayara Energy (formerly Essar Oil): Rosneft (~49.13%), Trafigura/UCP consortium (~49.13%), remaining with Essar; operates Vadinar refinery (Gujarat, 20 MTPA)
- PNGRB regulates: downstream access (pipelines, city gas distribution), quality standards, and pricing of natural gas
Connection to this news: The halt in Russian crude purchases by India's three largest refiners (IOC, BPCL, and RIL) represents a coordinated shift affecting the bulk of India's refining capacity. Nayara's exception highlights the complication of Russian equity ownership in India's downstream sector.
Western Sanctions on Russian Energy and India's Response
Following Russia's invasion of Ukraine in February 2022, the US, EU, UK, and allies imposed successive rounds of sanctions on Russian energy exports. The EU imposed an oil price cap of $60/barrel on Russian crude (effective December 5, 2022), while banning seaborne Russian crude imports entirely. The UK aligned with the EU price cap. India, not party to these sanctions, dramatically increased Russian crude purchases, taking advantage of discounted prices.
- G7/EU oil price cap: $60/barrel on Russian seaborne crude (effective December 5, 2022); enforced through insurance and shipping services denial for cargoes above the cap
- EU ban on seaborne Russian crude: December 5, 2022; on Russian refined products: February 5, 2023
- US Treasury OFAC sanctions: targeted Russian banks (Sberbank, VTB), specific oil entities, and shadow fleet vessels
- India's position: not a party to Western sanctions; characterized purchases as legitimate market transactions
- Indian refiners used Rupee-Dirham-Rouble payment mechanisms and non-Western shipping/insurance to circumvent Western-controlled trade infrastructure
- Russia's share in India's crude imports: rose from <1% (pre-2022) to approximately 35% (FY 2024-25); import value surged from $1.1 billion to $50.2 billion
- New US sanctions (January 2025) on Russian oil companies Gazpromneft and Surgutneftegaz, and on approximately 183 vessels, created additional complications for Indian importers
Connection to this news: India's decision to halt Russian crude purchases is driven not by compliance with Western sanctions (which India never joined) but by the trade incentive of lower US tariffs, representing a shift from principled non-participation in sanctions to pragmatic economic recalibration.
Energy Diversification and India's Hydrocarbon Import Policy
India's energy security framework aims to diversify import sources to avoid overdependence on any single supplier or region. The Integrated Energy Policy (2006, by the Planning Commission under Kirit Parikh) recommended reducing import dependency through domestic production enhancement, strategic reserves, and source diversification. The current framework is guided by the India Energy Security Scenarios (IESS) 2047 calculator and various policy documents under NITI Aayog.
- India's crude oil import sources (pre-trade deal): Iraq (approximately 21%), Russia (approximately 35%), Saudi Arabia (approximately 15%), UAE, Kuwait, Nigeria, and the US
- India's crude oil import dependency: approximately 88% (FY 2024-25); natural gas import dependency: approximately 50.8%
- Strategic Petroleum Reserves (SPR) Phase I: 5.33 MT at Visakhapatnam (1.33 MT), Mangalore (1.5 MT), and Padur (2.5 MT) -- approximately 9.5 days of consumption
- SPR Phase II approved: Chandikhol (Odisha) and Padur expansion, adding 6.5 MT (approximately 12 additional days of cover)
- Hydrocarbon Exploration and Licensing Policy (HELP, 2016): replaced NELP; features uniform license, open acreage, revenue sharing model, marketing and pricing freedom
- India's Energy Transition: target of 500 GW non-fossil fuel power capacity by 2030 (updated NDC, August 2022); 50% cumulative electric power from non-fossil sources by 2030
Connection to this news: The rapid shift away from Russian crude toward US or Middle Eastern alternatives, while responding to trade incentives, simultaneously tests India's energy diversification strategy by potentially replacing one form of source concentration (Russia) with another (US-aligned suppliers).
Key Facts & Data
- India's refining capacity: approximately 256 MTPA (4th globally); 23 refineries
- IOC: 11 refineries, approximately 80.7 MTPA; BPCL: 4 refineries, approximately 38.3 MTPA
- Jamnagar (RIL): world's largest single-location refinery complex (approximately 68.2 MTPA)
- Nayara Energy: Rosneft holds approximately 49.13%; Vadinar refinery capacity: 20 MTPA
- Russia's share of India's crude imports: from <1% (pre-2022) to approximately 35% (FY 2024-25)
- Target: reduce Russian crude below 1 million bpd (March), then 500,000-600,000 bpd
- G7/EU oil price cap on Russian crude: $60/barrel (effective December 5, 2022)
- India's SPR capacity: 5.33 MT (Phase I), with 6.5 MT additional capacity approved under Phase II
- India's crude oil import dependency: approximately 88% (FY 2024-25)
- India's crude oil import bill: approximately $137 billion (FY 2024-25)