India’s reliance on Russian crude has increasingly shifted from a discount-driven trade to a response to supply disruptions in West Asia, with the country importing around 298 million barrels from Russia since the start of the US-Iran war, according to an Axis Bank Research report dated September 21.
The report said India has imported Russian crude at an average of around 60 million barrels per month since the conflict began, compared with an average of about 46 million barrels per month during FY23-FY26. The shift comes as disruptions in West Asian supplies have reduced alternatives for Indian refiners. Recent reports have similarly indicated that Russian crude has become difficult to replace amid constrained West Asian supplies.
Russia’s share in India’s crude import basket had initially risen from almost zero in March 2022 to around 30 per cent by June 2023, when discounted barrels became available following Western sanctions. Axis Bank Research, however, said discounts alone no longer explain the subsequent increase in Russian crude purchases.
Discounts No Longer The Main Driver
The report noted that West Asian crude has traded at a premium of about $3-5 per barrel since 2023. At the same time, Russian crude's share in India’s imports continued to rise even when Russian barrels were trading at premiums of as much as $7 per barrel.
This suggests that availability and supply security have become increasingly important factors in India's crude sourcing decisions as disruptions constrain supplies from traditional West Asian producers.
Russia supplied 30.3 per cent of India’s crude imports in FY26, while its share had risen to 51 per cent by July 2026, according to separate trade estimates.
Axis Bank Research estimated that without the additional Russian supplies, India would have needed to procure another 60-80 million barrels from the spot market, potentially exposing refiners to higher prices.
Energy Market Could Complicate 100% US Tariff Threat
The changing crude market comes as India faces renewed trade uncertainty following US legislation giving President Donald Trump authority to impose tariffs of up to 100 per cent on major buyers of Russian energy. The law does not automatically impose a 100 per cent tariff on India, with implementation remaining subject to US executive action.
Axis Bank Research said prevailing energy-market conditions could reduce the likelihood of the maximum tariff being used, arguing that restricting Russian crude flows to India could further tighten global oil markets and push energy prices higher.
The report pointed to the potential impact on US consumers, with higher crude prices feeding into retail fuel prices and inflation. It also viewed the tariff threat as potentially providing leverage in trade negotiations rather than necessarily resulting in the maximum levy.
The pressure comes at a time when replacing Russian supplies remains difficult. Russian crude has accounted for more than half of India's imports in some recent months, while alternative West Asian grades have been more expensive amid continued regional supply disruptions.
For India, the shift underscores how Russian crude has moved beyond the discounted-oil trade that drove purchases after 2022. With West Asian supplies under pressure, the availability of Russian barrels has increasingly become part of the country’s broader energy-security equation.