Oil & Gas

India is actively exploring alternatives to Russian oil as fresh U.S. sanctions target tankers and entities involved in transporting Russian crude. Following Russia’s 2022 invasion of Ukraine, India became a major buyer of discounted Russian oil, with imports surging to 40% of its total oil purchases. However, recent developments, including tightened sanctions and diminishing discounts, are pushing India to diversify its supply sources.

The United States recently imposed new sanctions on January 10, targeting Russian oil producers and 183 vessels linked to transporting crude. Nearly 40% of these vessels have previously carried oil to India, raising concerns over supply disruptions. Indian energy policymakers are now prioritizing relationships with Middle Eastern exporters such as Saudi Arabia, the UAE, and Oman, as they work to secure stable alternatives.

Despite the challenges, India has already shown signs of diversifying its oil imports. Data from 2024 indicates that OPEC's share of India’s oil imports rose for the first time in nine years, reaching 51.5%. While Russia's share remains significant at 36%, India’s broader supplier base now includes new entrants like Brazil and Guyana, ensuring a more balanced energy mix.

India’s Petroleum Minister Hardeep Singh Puri has affirmed that the government is expanding its pool of crude suppliers from 27 to 39 countries to ensure supply security. Although India continues to purchase Russian oil, its reliance on Moscow may gradually decrease as the country adapts to new geopolitical realities and prioritizes energy security. The extent of this shift will likely become clearer at February’s India Energy Week, where further announcements are expected.