What Happened
- Saudi Arabia has emerged as India's top crude oil supplier in February 2026, supplying approximately 1.13 million barrels per day (bpd) in the first 10 days of the month, overtaking Russia's 1.09 million bpd.
- The shift follows India's agreement on an interim trade deal framework with the US administration, which included a commitment to reduce dependence on Russian oil.
- Saudi Aramco's $0.30-per-barrel price cut and lower freight costs from Saudi Arabia compared to Russian ports have made Saudi crude more competitive.
- Russian oil shipments to India had already declined from 2 million bpd in October 2025 to 1.3 million bpd in December 2025.
- The realignment is also driven by tightened US and EU sanctions on the fleet of tankers carrying Russian oil.
Static Topic Bridges
India's Crude Oil Import Dependency and Energy Security
India is the world's third-largest oil consumer and importer, with crude oil import dependency reaching 89.1% in March 2025. India imports approximately 4.7-5 million bpd of crude oil. Energy security -- ensuring reliable, affordable, and sustainable energy supply -- is a critical policy objective. The International Energy Agency (IEA) defines energy security as "the uninterrupted availability of energy sources at an affordable price." India's Strategic Petroleum Reserves (SPR), managed by the Indian Strategic Petroleum Reserves Limited (ISPRL) under the Ministry of Petroleum, provide a buffer against supply disruptions.
- India's crude oil import bill: approximately $140 billion (2024-25)
- Strategic Petroleum Reserves: 5.33 million tonnes at 3 locations -- Visakhapatnam (1.33 MT), Mangalore (1.5 MT), Padur (2.5 MT)
- SPR capacity: approximately 9.5 days of import cover; Phase II (additional 6.5 MT at Chandikhol and Padur) under development
- India's crude oil basket: weighted average of Oman-Dubai (sour) and Brent (sweet) crude prices
- Top suppliers (pre-February 2026): Russia (34%), Iraq (20%), Saudi Arabia (15%), UAE (8-10%)
Connection to this news: The shift from Russia to Saudi Arabia as India's top supplier reflects a realignment driven by geopolitical pressures (US trade deal conditions) and commercial considerations (lower freight, Aramco price cuts), highlighting the vulnerability of India's energy security to external geopolitical dynamics.
Western Sanctions on Russian Oil and the Price Cap Mechanism
Following Russia's invasion of Ukraine in February 2022, Western nations imposed sweeping sanctions on Russian energy exports. The G7-led price cap on Russian seaborne crude oil was set at $60 per barrel (effective December 2022), enforced through restrictions on Western shipping, insurance, and financial services. India emerged as a major buyer of discounted Russian crude -- Russia's share of India's oil imports surged from under 2% (pre-2022) to approximately 34% by mid-2025. The US has further tightened sanctions on the "shadow fleet" of ageing tankers used to circumvent the price cap.
- G7 price cap on Russian crude: $60/barrel (December 5, 2022); on petroleum products: February 5, 2023
- Shadow fleet: approximately 600 tankers (est.) operating outside Western insurance and classification
- India's Russian crude imports peaked at approximately 2 million bpd in mid-2025
- Russia's oil revenue declined: January 2026 tax revenue fell approximately 50% year-on-year to approximately 380 billion roubles ($4.7 billion)
- OFAC (US Office of Foreign Assets Control) designations of specific tankers and entities increased in 2025-26
Connection to this news: The decline in Russian oil flows to India (from 2 million bpd to 1.09 million bpd) is directly linked to tightened sanctions enforcement, making previously discounted Russian crude less accessible and more expensive to transport.
India-Saudi Arabia Energy Partnership
India and Saudi Arabia have a long-standing energy relationship. Saudi Arabia was India's largest oil supplier for decades until Russia overtook it in 2023. The India-Saudi Arabia Strategic Partnership Council, established in 2019, covers energy, trade, and investment. Saudi Aramco has explored investments in Indian refining (proposed Ratnagiri mega-refinery) and has a 20% stake in Reliance Industries' oil-to-chemicals business. Saudi Arabia is also a key supplier of LPG to India.
- India-Saudi Arabia Strategic Partnership Council: established October 2019 during PM Modi's Riyadh visit
- Saudi crude pricing: Saudi Aramco sets Official Selling Prices (OSPs) monthly for Arab Light, Arab Heavy, etc.
- Proposed Ratnagiri refinery: 60 MTPA capacity, joint venture with Aramco and ADNOC (under review)
- Saudi Arabia's OPEC+ role: Saudi is the de facto leader of OPEC+, influencing global production levels
- Bilateral trade: approximately $52 billion (2023-24); India is Saudi Arabia's second-largest trade partner
Connection to this news: Saudi Aramco's $0.30/barrel price cut for Asian buyers is a competitive pricing strategy to regain market share from discounted Russian crude, particularly as geopolitical conditions create an opening for traditional Middle Eastern suppliers.
Key Facts & Data
- Saudi Arabia's supply to India (Feb 2026, first 10 days): approximately 1.13 million bpd
- Russia's supply to India (Feb 2026, first 10 days): approximately 1.09 million bpd
- Russia's peak supply to India: approximately 2 million bpd (October 2025)
- India's crude oil import dependency: 89.1% (March 2025)
- India's daily crude oil consumption: approximately 5.5 million bpd
- Saudi Aramco price cut: $0.30 per barrel for February 2026 loadings
- India-US trade deal condition: commitment to reduce/stop Russian oil imports