In June 2025, India significantly increased crude oil imports from both Russia and the United States, surpassing shipments from traditional Middle Eastern suppliers like Saudi Arabia and Iraq. This shift reflects India’s strategic response to volatile global energy markets driven by Middle East tensions and shifting freight dynamics
Why Russia and the US?
- Russian Discounts & Freight Ease
India imported more oil from Russia in June than from Saudi Arabia and Iraq combined. Generous discounts on Russian crude, combined with a drop in freight rates from Baltic ports to India, made Russian oil especially attractive - US as Fourth Largest Supplier
June also saw a surge in US crude imports—the highest since February 2022—focused on light sweet grades from shale, appealing to complex Indian refineries for blending purposes
Impact of Middle East Tensions
Ongoing geopolitical conflicts, especially the Israel-Iran tensions, disrupted Middle Eastern supply chains. India responded by diversifying procurement toward Russia and the US to ensure stable energy availability
What This Means for India
- Stronger Energy Security
Diversification reduces India’s dependence on any single region, helping shield its economy from sudden supply shocks or price spikes. - Strategic Flexibility
A varied crude basket places India in a better negotiating position and buffers it against geopolitical disruptions or sanctions influencing oil availability. - Refining & Cost Advantage
Lower-cost Russian Urals and market-responsive US light crude support complex refining systems—potentially delivering better margins and domestic fuel pricing.
Potential Risks & Considerations
- Future Sanctions
Proposed EU and US secondary sanctions (e.g., lower price caps, tanker restrictions) could disrupt Russian oil trade flows and challenge India’s logistics - Middle Eastern Retaliation
Continued Middle East instability may trigger supply cuts or pricing maneuvers from OPEC members responsive to price increases
Looking Ahead
- Freight & Sanction Monitoring
India will need to track evolving freight rates and regulatory action closely to maintain a consistent Russian oil supply. - Expanded US Ties
With increased U.S. crude imports, India may deepen energy cooperation with Washington, complementing LNG and trade agreements - Domestic Impact
If costs remain lower, importing cheaper crude may ease pressures on fuel subsidies and inflation. However, any future constraints could reverse those gains.
Conclusion
India’s June surge in oil imports from Russia and the US signals a deliberate strategy to hedge against geopolitical risks and achieve energy resilience. While discounts and supply security are appealing, navigating future sanctions and market disruptions will be critical for sustaining this diversified approach.
