In July, more than one out of every two barrels of crude oil India imported came from Russia — the first time Moscow’s share has crossed the halfway mark.
According to commodity analytics firm Kpler, India imported a record 2.78 million barrels per day (mbd) of Russian crude during the month, up 1.5% from June, against overall crude imports of 4.96 mbd. The UAE and Saudi Arabia remained the second and third-largest suppliers, but together supplied far less than Russia.
The record, however, comes at a curious time. The US Senate has advanced legislation that could impose tariffs as high as 100% on the world’s largest buyers of Russian oil and gas, with India and China widely expected to be among those affected if it becomes law.
Yet Indian refiners aren’t pulling back. So why hasn’t the threat of potentially punishing US tariffs changed India’s Russian oil strategy?
The simple answer is that the proposed US tariffs are still far from becoming law.
The legislation, named in honour of the late Senator Lindsey Graham, has cleared procedural hurdles in the US Senate and could pass the upper chamber soon. However, it faces a much tougher path in the House of Representatives, which is currently in recess until the end of August.
The bill has drawn opposition not only from Democrats but also from some Republicans and industry groups, who argue it would hand President Donald Trump sweeping new tariff powers and could fuel inflation in the US. Republican Senator Rand Paul has already proposed amendments to limit those powers, while trade experts believe the legislation could struggle to pass the House in its current form.
In other words, Indian refiners are dealing with a proposal, not an enacted law.
Until there is clarity on whether the legislation will become law—and what its final provisions look like—there is little commercial incentive to overhaul procurement strategies that have worked well over the past three years.
WHY RUSSIAN OIL STILL MAKES COMMERCIAL SENSE
Russian crude oil also continues to make economic sense.
Since Western sanctions reshaped global oil trade in 2022, Russian crude has consistently been available at competitive prices compared with many other grades. For Indian refiners, that has meant access to reliable supplies while keeping feedstock costs under control.
Even though benchmark crude prices have eased in recent days, Russian barrels continue to remain commercially attractive for refiners that have already established supply chains and long-term purchasing relationships.
According to Kpler Senior Research Analyst Nikhil Dubey, India’s diversified sourcing strategy has helped refiners maintain supply security despite evolving geopolitical risks.
Ironically, the recent conflict in West Asia has strengthened the case for buying Russian crude.
Escalating tensions around the Strait of Hormuz and the Bab el-Mandeb Strait disrupted shipping routes and raised fears over supplies from traditional Middle Eastern producers.
Kpler notes that any prolonged disruption could force tankers to divert around the Cape of Good Hope instead of using the Red Sea route. Such a diversion would add nearly two weeks to shipping time while significantly increasing freight costs, fuel consumption and war-risk insurance premiums.
Against that backdrop, Russian supplies have become even more valuable because they offer greater certainty at a time when geopolitical risks continue to cloud Middle Eastern exports.
FALLING OIL PRICES MAY NOT CHANGE THE EQUATION
Oil prices have cooled sharply over the past few sessions, but that doesn’t immediately change India’s buying pattern.
On Monday, Brent Crude was trading around $83.36 a barrel while US benchmark WTI crude slipped to $79.57, as hopes of renewed diplomacy in the Middle East eased concerns over supply disruptions.
Lower crude prices are undoubtedly positive for India, the world’s third-largest oil importer, as they help reduce the country’s import bill, ease inflationary pressures and support the rupee.
However, refiners do not make procurement decisions based solely on day-to-day movements in benchmark prices. Crude purchases are planned weeks and often months in advance, and supply reliability remains just as important as price.
As a result, the recent fall in oil prices is unlikely to immediately reduce India’s dependence on Russian crude.
WHAT COULD CHANGE IF THE US BILL BECOMES LAW?
That does not mean the tariff proposal can be ignored.
If the legislation is eventually passed in its current form, it would authorise the US President to impose 100% tariffs on major importers of Russian oil and gas.
Such a move could significantly complicate trade relations for countries like India and force refiners to reassess procurement strategies, especially if the tariffs begin affecting broader bilateral trade rather than only energy purchases.
It could also push Indian refiners to further diversify crude sourcing or increase purchases from producers in the Middle East, the US and Latin America, depending on price and availability.
For now, India’s record Russian crude imports reflect a practical commercial decision rather than a geopolitical statement.
The tariff proposal remains uncertain, while the need to secure stable and affordable energy supplies is immediate. Add to that the continuing risks around Middle Eastern shipping routes, and Russian crude continues to offer refiners a combination of price competitiveness and supply security.
The coming months will be crucial. If the proposed US legislation gathers momentum, Indian refiners may eventually have to rethink their sourcing strategy. But until then, Russia is likely to remain India’s largest oil supplier—even as Washington steps up efforts to curb Moscow’s energy revenues.
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