India’s romance with cheap Russian oil is cooling—just a touch.
Russian crude imports into India crept up 1% in the first half of 2025, totaling about 1.75 million barrels per day. That’s hardly a surge, considering the price allure that first pulled India deeper into Moscow’s oil orbit after the 2022 Ukraine invasion. And while Russia still holds the top supplier spot—accounting for 35% of India’s crude inflows—the real story isn’t the volumes. It’s the shrinking advantage.
The discount on Urals crude has narrowed to just $1.70–$2 per barrel below Brent, the slimmest since the war began. A year ago, Indian refiners were gorging on Russian barrels at far steeper markdowns. But a cocktail of reduced spot availability, refinery maintenance in Russia, and locked-in term deals (like Rosneft’s supply to Reliance) has tightened access and squeezed the spread.
Shipping costs, once a wild card, have momentarily dipped. Freight from Baltic ports to India fell to $5.0–$5.3 million per Aframax in July, as more Western-insured tankers came online. But that window could slam shut—again. The EU is prepping its 18th sanctions package, which could lower the price cap to $45. And President Trump, back in the White House, just threatened sanctions on buyers of Russian oil unless a peace deal materializes within 50 days.
Indian refiners aren’t panicking—yet—but they are preparing. Some are already shifting interest to Murban or WTI. And behind the scenes, India is quietly building three new strategic reserves.
India’s overall oil imports rose 4.3% in the first half to 5.2 million bpd. But the easy ride on Russian discounts may be ending. As one trader put it, the freight volatility is asleep, not dead.
By Julianne Geiger for Oilprice.com
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