India to cut direct Russian oil imports after new US sanctions on Rosneft, Lukoil

India’s refiners are set to sharply reduce direct imports of Russian crude from late November following new US sanctions on Rosneft and Lukoil that come into force on 21 November. Analysts say companies accounting for more than half of India’s Russian crude intake are preparing to comply with the restrictions, signalling a significant reshaping of the country’s oil procurement pattern.

Maritime intelligence firm Kpler expects Russian arrivals to India to fall steeply in December, with a gradual recovery through early 2026 via intermediaries and alternative trading routes.

Reliance Industries Ltd, the country’s largest importer of Russian oil and a long-term buyer of Rosneft cargoes, will halt direct purchases. State-run Mangalore Refinery and Petrochemicals Ltd and HPCL-Mittal Energy Ltd — a joint venture between Lakshmi Mittal’s Mittal Energy and Hindustan Petroleum Corporation Ltd — have also announced they will suspend future Russian cargoes.

Together, the three refiners accounted for more than half of the 1.8 million barrels per day (mbd) of Russian crude imported in the first half of 2025.

Nayara Energy’s Vadinar refinery, partly owned by Rosneft and already under EU sanctions, is expected to continue taking Russian crude without major changes to its procurement mix.

Sumit Ritolia, lead research analyst (refining & modelling) at Kpler, said Russia remained India’s top crude supplier in October, ahead of Iraq and Saudi Arabia. He noted that Russian shipments had begun to decline after 21 October as refiners adjusted their exposure to OFAC (Office of Foreign Assets Control)-linked risks.

According to Ritolia, most refiners are likely to comply with the US sanctions, resulting in 'a sharp decline in Russian crude arrivals in December', followed by a “gradual recovery through mid-to-late Q1 2026” as new intermediaries and routes emerge.

To compensate for the reduced Russian inflow, refiners are scaling up purchases from the Middle East, Latin America, West Africa, Canada and the United States. US crude deliveries to India surged to 5,68,000 barrels per day (kbd) in October — the highest since March 2021 — driven largely by favourable economics and arbitrage.

These volumes are expected to normalise to 250–350 kbd over December and January. However, analysts caution that higher freight costs could curb the extent of substitution, particularly for long-haul Latin American and US grades.

Nonetheless, India’s import basket is expected to broaden, with incremental volumes likely from Brazil, Argentina, Colombia, Guyana, the US Gulf Coast, and West African suppliers.

While direct Russian shipments are set to dip from December, Ritolia said Russian barrels will “continue reaching India through intermediaries”, preserving Moscow’s footprint in the Indian market despite tightened compliance.

With PTI inputs