India’s largest private oil refiner, Reliance Industries, is reportedly stopping its purchases of Russian crude oil. This as a consequence of the new U.S. sanctions on Russia’s top energy giants, Rosneft and Lukoil. This move marks a major shift, as Reliance had become one of the biggest buyers of Russian oil. The company has been importing about 630,000 barrels per day in September, roughly half of its total crude intake.
The U.S. Treasury imposed sanctions on the two Russian firms over Moscow’s continued war in Ukraine, aiming to weaken the Kremlin’s war financing. While Reliance has not publicly confirmed the halt, experts warn that the decision could hurt its profit margins. The margin of Russian crude accounted for more than 50% of its oil mix and was significantly cheaper by about $5–6 per barrel compared to Middle Eastern oil. Although alternatives from West Asia, Brazil, or Guyana are available, Reliance may lose access to the steep discounts it had secured through long-term contracts with Rosneft. The contracts included a 10-year, $12–13 billion deal signed in 2023.
‘Opportunistic buying’
Analysts describe India’s Russian oil purchases as “opportunistic buying” during the energy crisis, driven by discounted prices. In September, India bought 38% of Russia’s crude exports, second only to China. However, the advantages of this arrangement have diminished as global oil prices stabilized, and sanctions made transactions riskier.
Despite short-term disruptions, financial analysts from Jefferies and Rystad Energy believe the overall impact on Reliance’s earnings will be manageable, estimating Russian crude’s contribution to about 2% of its EBITDA. Meanwhile, other Indian refiners are also expected to reduce imports from Russia, aligning with U.S. expectations.
Hope of a U.S deal
Strategically, this shift could improve India’s trade relations with the United States, which had previously imposed 50% tariffs on Indian exports over energy policy disagreements. As India moves to diversify its oil sources, analysts suggest that cutting Russian imports may pave the way for a potential U.S.–India trade deal, signaling a broader geopolitical recalibration in New Delhi’s energy diplomacy.
Reference
Salve, P. (2025, October 24). What a cut in Reliance’s Russian crude purchases would mean for India. CNBC. https://www.cnbc.com/2025/10/24/what-a-cut-in-reliances-russian-crude-purchases-would-mean-for-india.html