Shifting from Russian Oil Imports Will Currently Not Hurt India Financially

New Delhi: India’s gradual shift away from Russian oil imports is unlikely to cause immediate financial stress, according to experts and recent import data. Despite concerns around energy security, falling global crude prices and shrinking Russian discounts have reduced the economic advantage India once enjoyed.

Key Insight: The price difference between Russian and U.S. oil has narrowed significantly, limiting the financial impact of reducing Russian oil imports.

Why Russian Oil Was Attractive to India

Following global sanctions on Russia, India significantly increased its crude oil purchases from Moscow due to heavy discounts. At one point, Russian oil was nearly 20% cheaper than market alternatives, making it highly attractive for Indian refiners.

However, this advantage has eroded over time.

Russian Oil Discount Has Shrunk Sharply

Data from recent months shows that the discount India received on Russian crude has fallen considerably. In November 2025, India received an average discount of just $16.1 per tonne on Russian oil, compared to much higher savings in 2022.

At the same time, the premium paid on U.S. crude oil has remained relatively stable at around $24–25 per tonne, making the overall cost difference less significant.

Low Global Oil Prices Cushion the Impact

One major reason India can afford to diversify away from Russian oil is the current low global oil price environment. Crude prices are hovering near multi-year lows, reducing pressure on import bills and inflation.

Experts note that even if India reduces Russian imports substantially, the financial impact would remain limited under current conditions.

Quality Difference Between Russian and U.S. Oil

Russian crude is generally heavier and contains higher sulphur content, which is considered lower quality compared to U.S. crude. American oil is lighter, cleaner, and often yields better refining outcomes.

This quality difference partly explains the premium India pays for U.S. oil.

Could Future Risks Emerge?

While the present situation appears manageable, analysts warn that risks could emerge if global oil prices rise sharply in the future.

If crude prices return to the $80–90 per barrel range, the absence of discounted Russian oil could begin to strain India’s finances.

Other Risk Factors Include:

• Depreciation of the Indian Rupee
• Higher logistics costs from the U.S.
• Geopolitical supply disruptions

Expert Opinion

Energy experts believe that while Russian oil helped India save significantly in the past, the current market dynamics have reduced its importance.

“Strategic considerations are different, but economically, shifting away from Russian oil will not make much of a difference right now,” analysts suggest.

Conclusion

India’s potential shift away from Russian oil imports is unlikely to hurt the economy in the short term. With global oil prices low and discounts narrowing, diversification towards suppliers like the U.S. appears financially manageable.

However, policymakers will need to remain cautious and flexible as global energy markets remain unpredictable.

Stay tuned for more updates on India’s economy, energy policy, and global oil trends.