India’s largest private oil refiner, Reliance Industries, is reportedly stopping purchases of Russian crude following U.S. sanctions on Russia’s top oil firms, Rosneft and Lukoil. The move comes after the U.S. Treasury Department cited Moscow’s “lack of serious commitment” to ending the war in Ukraine, aiming to curb the Kremlin’s ability to finance its military operations.
Reliance had become a major buyer of Russian crude, importing around 629,590 barrels per day in September — nearly 40% of India’s total crude imports of 1.6 million barrels per day. A year ago, Reliance purchased roughly 428,000 barrels per day from the two Russian firms. Experts note that Russian crude now accounts for about one-third of India’s total crude import basket, up from less than 3% previously.
Impact on Refining Margins
Market analysts warn that halting Russian imports could affect Reliance’s margins and profitability, as more than 50% of its crude supply previously came from Russia. Pankaj Srivastava, SVP of commodity oil markets at Rystad Energy, noted that alternative sources from West Asia, Brazil, or Guyana are available, but they may come at a higher cost than discounted Russian crude.
Reliance had a decade-long agreement with Rosneft, signed in December last year, to import $12–13 billion worth of crude annually, translating to roughly 500,000 barrels per day. Analysts describe India’s previous purchases as “opportunistic buying,” driven by the discount on Russian crude relative to comparable grades.
Broader Indian Refinery Response
Other Indian refiners are also expected to reduce Russian imports, though switching suppliers could put some pressure on refining margins. Experts say the financial impact on Reliance is manageable: Jefferies noted that Russian crude benefits accounted for just 2.1% of Reliance’s estimated consolidated EBITDA for fiscal year 2027.
Reliance’s total EBITDA for the first half of fiscal year 2026 was 1.08 trillion rupees ($12.3 billion), with the oil-to-chemicals segment contributing 295 billion rupees and telecom and retail ventures together contributing nearly 500 billion rupees.
Strategic and Diplomatic Implications
Reducing dependence on Russian oil may also ease tensions with the United States. India’s reliance on Russian crude has previously strained trade relations, culminating in U.S. tariffs on Indian exports. Analysts suggest that curbing Russian purchases improves India’s prospects for a mutually beneficial U.S.-India trade deal.
Experts also note that the arbitrage advantage of Russian crude has diminished as global energy markets stabilize. Natixis Senior Economist Trinh Nguyen said that India now has little strategic need for significant Russian oil imports.