Why Cutting Russia Out of India’s Oil Mix Won’t Be Easy

By Irina Slav – Feb 07, 2026, 6:00 PM CST

India’s refiners rely on discounted Russian heavy crude that is difficult and costly to replace.
Switching to U.S. oil would raise costs and strain refinery operations.
Washington’s tougher stance marks a sharp reversal from the Biden-era tolerance of India’s Russian oil buying.

India imports 85% of the oil it consumes. A third of that comes from Russia—or used to come from Russia, until last November, when President Trump’s administration sanctioned the top exporters. Now, Washington is doubling down on cutting India’s oil link with Russia, but it may prove tricky for the world’s second-largest importer of oil.

“Even though India has reduced its purchase of crude oil from Russia in recent months, it is unlikely to cease all purchases immediately, which could be disruptive to India’s economic growth,” Moody’s said earlier this week in a note following the news that Washington and New Delhi had reached an agreement on a trade deal, to be signed officially in March.

President Trump announced the progress in the trade deal talks, saying the U.S. would reduce tariffs on Indian imports in exchange for a commitment on the part of New Delhi to stop buying crude oil from Russia and boost purchases of American oil instead, along with other goods and commodities.

Russia did not appear fazed by Trump’s plans. “We, along with all other international energy experts, are well aware that Russia is not the only supplier of oil and petroleum products to India. India has always purchased these products from other countries. Therefore, we see nothing new here,” Dmitry Peskov, Kremlin spokesman, told media.

India’s The Hindu also quoted an energy expert from the National Energy Security Fund of Russia as noting the difference in the properties of U.S. crude and Russian crude. “The American shale oil they export is light grades, similar to gas condensate. Russia, on the other hand, supplies relatively heavy, sulfur-rich Urals. This means India will need to blend U.S. crude with other grades, which incurs additional costs, meaning a simple substitution won’t be possible,” he said.

Cost is the key word when it comes to India and crude oil imports. It is the most likely reason that while President Trump has been celebrating India’s commitment to stop buying Russian oil on social media, India itself has been in no rush to either confirm that commitment or even comment on it. Instead, Prime Minister Narendra Modi said on X that it had been “Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.”

That tariff reduction from 25% to 18% is contingent on India suspending purchases of Russian oil, and the omission of that part of the deal is telling. Before 2022, India imported meager volumes of Russian oil, at less than 100,000 barrels daily on average in 2021, per data from Vortex cited by the Wall Street Journal. By June 2022, that had gone up to 930,000 barrels daily. By July 2023, the average daily volume of Russian crude going into India had soared to 1.97 million barrels. In January this year, the average volume of Russian oil for India stood at 1.06 million barrels daily, per Vortexa—two months after the sanctions against Rosneft and Lukoil went into effect.

The WSJ also points out the cost consideration. U.S. crude is more expensive for Indian buyers, not least because it takes longer to ship it all the way to India from the Gulf Coast. The publication cited Vortexa analysts as saying the switch would cost Indian refiners an additional $7 per barrel, which is unlikely to sit well with most of them. In further financial challenges, “Refiners are technically capable of operating without Urals, but a rapid disengagement would be commercially challenging and politically sensitive,” one Kpler analyst told the WSJ.

This is probably why Indian refiners looking for alternatives to Russian crude have been buying a lot of Middle Eastern oil, including from Iraq, the UAE, and even from West Africa. Analysts point to Venezuelan crude as an alternative to Russia’s heavy, sour grades, but the rate of Venezuelan production and exports is insufficient to replace Russian barrels—especially at an acceptable price. Price has always been a top priority for Indian oil importers—and the previous U.S. administration utilized this in its plans to squeeze Russia’s oil income without causing a spike in prices.

The United States under Biden had zero problem with India becoming a major oil customer of Russia. In fact, the Biden admin asked India to step up its Russian oil purchases following Russia’s 2022 incursion into Ukraine and the consequent start of sanctions. As then Treasury Secretary Janet Yellen told Reuters back then, Russian oil “is going to be selling at bargain prices and we’re happy to have India get that bargain, or Africa, or China. It’s fine.” Two years later, it stopped being fine, and now, under Trump, it is anything but fine, even as negotiations with Moscow on the fate of Ukraine continue.

By Irina Slav for Oilprice.com

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