India slips to third among Russian fossil fuel buyers amid sanctions; December imports hit lowest level since price cap — Key factors

India’s position as one of the world’s largest buyers of Russian fossil fuels slipped in December, as a sharp fall in crude oil imports pushed the country to third place behind China and Turkiye. The decline comes at a time when global sanctions, tighter price caps and growing geopolitical pressure are reshaping energy trade flows, forcing Indian refiners to recalibrate sourcing strategies after nearly two years of heavy dependence on discounted Russian oil.

An analysis by the Europe-based think tank Centre for Research on Energy and Clean Air shows that India’s imports of Russian hydrocarbons fell to €2.3 billion in December, down from €3.3 billion in November. Turkiye moved into second position with purchases worth €2.6 billion, while China retained its top spot, accounting for nearly 48 per cent of Russia’s export revenues from the five largest buyers. The data underline a clear slowdown in India’s Russian energy trade during the month, even as global demand for fossil fuels remained broadly stable.

Crude oil continues to dominate India’s Russian imports

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Crude oil remained the backbone of India’s fossil fuel purchases from Russia, accounting for 78 per cent of total imports in December. According to the CREA analysis, crude oil imports were valued at €1.8 billion, while coal shipments stood at €424 million. Refined oil products made up a relatively small portion of the basket, valued at €82 million.

Despite crude retaining its dominant share, volumes dropped sharply. Month-on-month, India’s crude oil imports from Russia fell by 29 per cent, marking the lowest level since the introduction of the international price cap mechanism on Russian oil.

The contrasting trends highlight how crude oil flows, rather than broader energy trade, drove India’s fall in ranking among Russian buyers.

Price cap pressure tightens around Russian oil

December also saw a fresh squeeze from price controls imposed by Western countries. The average price of Russia’s Urals crude fell 6 per cent during the month to 51.9 dollars per barrel. However, this was still above the revised price cap of 47.6 dollars per barrel.

The cap is enforced by the European Union, the United Kingdom, Canada, Norway, Switzerland and Australia. Washington imposed a 50 per cent tariff on Indian goods, including a 25 per cent punitive duty linked specifically to imports of Russian oil. At the same time, it sanctioned Rosneft and Lukoil, two of Russia’s largest oil producers.

While India has consistently defended its right to secure affordable energy for its economy, the cumulative impact of tariffs, sanctions and compliance requirements has made Russian crude less straightforward to procure.

The decline in December imports was led largely by Reliance Industries, which operates the world’s largest refining complex at Jamnagar in Gujarat. According to CREA, the entirety of Reliance’s Russian crude imports during the month was supplied by Rosneft and sourced from cargoes purchased before the US Office of Foreign Assets Control sanctions came into effect.

As new sanctions kicked in, Reliance scaled back fresh purchases, contributing significantly to the overall drop in India’s Russian crude intake.
State-owned refiners followed a similar path, reducing their Russian crude purchases by around 15 per cent. As a result, Russia’s share in India’s crude oil imports fell to about 25 per cent in December, down from 35 per cent in November.

The report also tracked exports of refined petroleum products made from Russian crude. In December, five refineries in India, Turkiye and Brunei exported oil products worth €943 million to countries that have imposed sanctions on Russia.

Of this, shipments refined from Russian crude and sold to sanctioning nations were estimated at €274 million. Buyers included the European Union, the United States, the United Kingdom and Australia.

Overall exports of such refined products declined 9 per cent from November, driven mainly by lower shipments to the EU and the UK. Exports to Australia, however, recorded an increase, partially offsetting the fall.

These figures continue to fuel debate over so-called “laundering” of Russian oil through third-country refining hubs, even though such trade remains legally permissible under current sanction frameworks.

EU remains a major buyer via gas imports

Despite its sanctions on Russian oil, the European Union remained the fourth-largest buyer of Russian fossil fuels in December, importing energy worth €1.3 billion. Russian oil still accounts for a substantial share of India’s crude basket, but the December data suggest that refiners are becoming more cautious as the cost-benefit equation tightens.