How Does India Get Russian Oil? Inside The Complex Supply Chain And Its Challenges

India and China are the largest buyers of Russian crude oil. Their import has shoot up after the sanction imposed by the Western countries following the Russia-Ukraine conflict. This shift has raised several questions about how India sources Russian oil, how India navigates the complex geopolitical challenges, how India still maintains its energy security irrespective of the global sanctions.

Sourcing Russian Oil: Maritime Routes and Non-Sanctioned Shipping

Most of the global export takes place through Sea Routes. India also sources Russian crude through marine routes from Russia’s Far Eastern, Black Sea, and Baltic Sea ports. In order to bypass Western sanctions, India is heavily dependent on non-sanctioned vessels and Indian-approved insurance companies. 

During Russia-Ukraine war, the prices of Russian oil have been discounted by up to 30-40%. It makes an attractive offer to the Indian refiners. India’s public companies like IOC, BPCL, and private players like Reliance have explored and get benefit out of this heavy discount. 
Indian Institutional Channels

The financial entities ensure proper documentation without further involvement of the sanctioned entities. This facilitates the payments and transactions through non-sanctioned channels, therefore, avoiding any related secondary sanctions that could be imposed by the U.S.
Geopolitical Tensions: U.S. Pressure on India.

Despite India’s growing trade of Russian oil, the country also faces pressure from the US. President Donald Trump has threatened India to impose higher tariffs on Indian goods as a penalty for ongoing trade with Russia. The U.S. Treasury has also cautioned that countries defying the price cap on Russian oil could face further penalties.

The Way Forward: Balancing Energy Security and Geopolitics

The demand for crude oil is heavily increasing in India. Moscow, therefore, is playing a critical role in fulfilling this demand. However, the country is trying to navigate its local demand with the growing geopolitical and economic tensions. As the global energy landscape progresses, India faces a subtle balancing act through diplomatic relations and reframing global ties.

Also Read: Trump’s 25% Tariff On India: How It Could Disrupt Global Supply Chains in Pharma, Textiles, And Energy