Potential surge in global crude prices to reach $200 per barrel if India halts Russian oil purchases, insiders claim.
India's energy policy is guided by its national interest, as it continues to source a significant amount of Russian oil while also increasing imports of US crude. This strategic move contributes to global energy stability and influences market dynamics.
India's reliance on Russian oil, which has never been sanctioned by the United States or the European Union, has risen dramatically since the Ukraine war. Currently, Russian crude accounts for 35-40% of India's crude intake, a stark contrast to less than 0.2% before the conflict. This increased buying has provided a substantial alternative supply source at discounted rates, helping to stabilise Indian energy costs and influencing refinery margins globally.
However, this dependence on Russian crude also poses risks. Indian oil marketing companies have complied with the $60 per barrel price cap recommended for Russian oil by the US, but there are concerns about potential penalties from Western countries and constraints on import flexibility, which could affect costs going forward.
Meanwhile, India's imports of US crude have surged by over 50% in 2025, reaching 0.271 million barrels per day. This increase in US imports, alongside continuing Russian purchases, reflects India's strategy to balance national energy needs with global geopolitical pressures.
India's continued purchase of discounted Russian crude has benefited Indian refiners such as Reliance Industries Ltd and Nayara Energy. Lower input costs have enabled these companies to even export refined petroleum products, contributing to record profits.
However, the geopolitical tension and evolving sanction regimes complicate India's crude procurement and global pricing dynamics. Had Indian oil refiners not absorbed discounted Russian crude, global oil prices could have surged beyond the March 2022 peak of $137 per barrel, potentially intensifying inflation globally.
India, being the world's third-largest energy consumer with 85% import dependence, is navigating these complexities carefully. The country aims to secure affordable energy while adhering to international norms. In response to claims by former US President Donald Trump that India may cease purchasing Russian oil, India has defended its sovereign right to pursue an energy policy in its own national interest.
In the gas market, the EU remains the top buyer of pipeline gas from Russia, followed by Turkey and China. The EU is also the largest importer of Russian-origin liquefied natural gas (LNG), buying 51% of Russia's LNG exports, with China in second place at 21%.
In summary, India's continued purchase of Russian oil and increasing imports of US crude serve as a balancing act between national energy needs and global geopolitical pressures. This strategic approach exerts downward pressure on global crude prices by supporting demand for discounted Russian oil replacement volumes, while also influencing product exports. However, the evolving sanction regimes and geopolitical tension complicate India's crude procurement and global pricing dynamics.
- The ongoing purchase of discounted Russian oil by Indian oil companies, such as Reliance Industries Ltd and Nayara Energy, strongly influences their financial performance due to lowered input costs, allowing for record profits and even the export of refined petroleum products.
- Amidst the geopolitical tension and evolving sanction regimes, India's energy policy Follows its national interest, balancing oil imports from Russia and the surge in US crude, contributing to the news of a reduction in global oil prices and providing an alternative supply source that influences market dynamics within the energy industry.
- Eastern nations, including the European Union, Turkey, and China, continue to be significant buyers of Russian pipeline gas and liquefied natural gas (LNG), with the EU being the largest importer of Russia's LNG exports, upholding its importance within the global energy landscape.
