India’s oil market is split, with state-run refiners retreating from Russian crude amid US pressure and narrowing discounts while private refiners are stepping up sourcing.
State-run refiners cut Russian crude purchases in September, signalling caution. Their imports averaged 605,000 barrels per day (bpd) — 32 per cent below their April-August average, 22 per cent lower than in August, and 45 per cent below June levels, according to Kpler, a global real-time data and analytics provider. Private refiners lifted 979,000 bpd of Russian oil, 4 per cent above their April-August average, 8 per cent higher than in August, and nearly unchanged from June.
Russian crude accounted for just one in five barrels imported by state-run firms in September, and two in three barrels procured by local private refiners. Industry executives cited a mix of factors: rising risks around Russian volumes amid heightened US pressure to curb imports, narrowing discounts, and the need for state companies to diversify supply. With their larger responsibility toward the domestic market, state firms prioritise security over price, they said. Private companies, which hold only about 10 per cent of the local retail market, toggle between domestic and export sales to chase profit, they added.
Economical option
Reliance Industries benefits from a term deal with Rosneft, offering deeper discounts than spot market purchases. The deal also ensures a compulsory purchase of a minimum monthly volume of Russian crude. Nayara Energy, the Rosneft-backed refiner, remains overdependent on Russian barrels, unable to secure crude elsewhere.
“There has definitely been a stronger push for diversification of supply, but Russian oil remains central,” said Sumit Ritolia, lead research analyst, refining and modeling at Kpler. “Russian barrels remain among the most economical feedstock options for Indian refiners given their high gross product worth margins and discounts relative to alternatives.”
The drop in state-run purchases pulled overall Russian imports down 6 per cent from August and 13 per cent below the April-August average, to 1.58 million barrels per day.
