India’s oil refiners are re-evaluating their strategies for sourcing Russian crude as the U.S. waiver that had shielded Indian purchases ends. Analysts suggest that state-run companies, including Indian Oil Corporation and HPCL, will likely move toward diversifying their crude sources to mitigate the risks associated with potential secondary sanctions from OFAC. These firms, heavily reliant on Western financial systems for transactions, are especially sensitive to these regulatory changes.
In March 2026, India tripled its Russian crude imports to around €5.3 billion monthly, largely due to the Hormuz crisis, which disrupted Gulf oil supplies. Russian Urals crude offered significant discounts, making it an attractive alternative. However, this discount has diminished, and the added sanctions risk complicates the once-clear commercial advantage of sourcing from Russia.
Indian refiners are now exploring three key supply corridors: Middle Eastern crude from Saudi Arabia, West African oil from Nigeria and Angola, and increasingly available U.S. crude. While major state-run refiners will shift away from Russian oil, private companies like Reliance may still source limited Russian volumes where economically viable.
The shift away from Russian crude also affects the tanker fleet. Many vessels transporting this oil belong to the ‘shadow fleet,’ which operates outside standard regulations. India’s tanker expansion aims to establish a compliant fleet, ensuring safe and regulated transport from various origins, including Russian and non-Russian sources.
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