Russia is quietly but urgently working to preserve its access to India’s oil market, as officials in Moscow brace for the possibility that the United States will intensify pressure on New Delhi to curb its purchases of Russian crude. Despite the strain, there is no visible rupture in the relationship between the two countries. India remains one of Russia’s most dependable economic partners, even as Washington searches for new ways to weaken those ties.
For Moscow, the stakes are high. Russia’s economy is under growing strain, and India has become indispensable. Since the war in Ukraine began, India has emerged as the world’s second largest buyer of Russian crude oil, purchasing vast quantities at steep discounts created by Western sanctions.
While the United States and Europe have imposed sweeping restrictions on Russian energy exports, China and India have continued to play an outsized role in keeping Russian oil flowing and state revenues afloat. Most other countries have sharply reduced their exposure. These two have not.
Industry analysts say Russia is already maneuvering to bypass the latest round of United States sanctions to ensure that discounted crude continues reaching Indian refiners. More such efforts are expected.
Washington Turns Up the Heat
The pressure on India has grown sharper in recent months. Despite an improving personal rapport between Donald Trump and Prime Minister Narendra Modi, broader United States India relations have deteriorated as Trump has stepped up efforts to push New Delhi away from Russian oil.
Trump has accused India of indirectly financing President Vladimir Putin’s war in Ukraine. In August, he imposed a 25 percent tariff on Indian imports into the United States, citing India’s continued purchases of Russian crude.
India refused to yield. Government officials said the country’s energy policy was a sovereign matter and would not be dictated by outside powers. Trade negotiations that followed failed to produce an agreement.
Last week, the Trump administration escalated further, threatening tariffs of up to 500 percent and warning that the United States could withdraw from several India led global initiatives if Russian oil imports continued.
The threats coincided with renewed scrutiny of whether the latest sanctions would succeed in disrupting Russia’s oil flows to India. Some officials in Washington have called for even harsher measures.
Sanctions Bite, Then Bend
At the end of November, the United States imposed sanctions on companies and refineries purchasing oil from Rosneft and Lukoil, Russia’s two largest oil exporters and the main suppliers to India.
Initial figures suggested the measures had teeth. India’s imports of Russian crude fell from an average of 1.7 million barrels per day to about 1.2 million barrels per day in December, a drop of roughly one third.
Yet the decline may prove temporary. Even after the sanctions took effect, four of India’s seven largest refineries continued to rely primarily on Russian oil.
Export data shows that Russia has already begun reshaping its supply chains. A loophole in the sanctions allows refineries to avoid penalties if oil is supplied by companies other than Rosneft or Lukoil.
By December, several new Russian oil exporters had emerged. Analysts believe these firms are designed to function as intermediary sellers, operating between Russia’s major producers and refineries in countries like India.
Industry experts say this reorganization could be completed within two or three months, allowing most shipments to resume under new corporate identities.
India’s Quiet Calculus
So far, India’s government has refrained from issuing explicit guidance to state owned or private refiners about Russian oil purchases. Instead, companies have been told to act in their commercial interests.
During a visit to India in December, President Putin pledged that Russian oil shipments would remain uninterrupted, despite growing pressure from the United States.
The appeal is straightforward. India imports about 90 percent of its crude oil, and Russian supplies have become increasingly attractive. After the latest sanctions, discounts widened further, leaving Russian oil nine to ten dollars per barrel cheaper than crude from Saudi Arabia or Iraq.
For refiners willing to accept the risk, the savings amount to nearly four billion dollars a year. Analysts expect imports, particularly by public sector firms, to rebound to previous levels.
Reliance Steps Aside
One major exception is Reliance, India’s largest private oil company and formerly the country’s biggest buyer of Russian crude. Since November, the company has said it will no longer import Russian oil into its Jamnagar refinery, citing its record of sanctions compliance. January marked the first month in which it imported none.
Reliance’s position reflects its global exposure. European Union rules prohibit Russian origin oil refined in third countries from entering the bloc, which is one of Reliance’s largest markets for diesel and jet fuel.
As the company searches for alternatives, analysts point to possible openings in Venezuela. Reports indicate that Reliance is among the firms in talks with Washington to secure approval to resume Venezuelan oil purchases, which India imported before sanctions were imposed. A company spokesperson said Reliance would consider buying the oil in a compliant manner.
How Far Sanctions Can Go
Oil has long been the backbone of Russia’s economy, far more central than gas exports to Europe. As a result, falling oil prices pose a direct threat to state finances. Additional pressure from United States actions affecting Venezuelan production could deepen that strain. Some observers draw parallels with Iran, where prolonged sanctions and external pressure contributed to shortages and unrest. Whether Russia could face a similar trajectory remains uncertain.
Putin’s administration has shown greater competence in managing domestic finances than in prosecuting the war itself. Economic growth has stalled, but the system has been structured to absorb shocks. Even so, the current moment has pushed Moscow to place renewed emphasis on maintaining ties with India. So much effort is going through the diplomatic level. Russian officials appear eager to keep at least India’s public sector oil companies engaged, given the scale of their energy needs and the volume of crude they consume.
How far United States sanctions can ultimately go remains an open question. Additional penalties, combined with the prospect of discounted Venezuelan oil or alternative suppliers, could test India’s calculations. Yet the relationship between India and Russia extends beyond commerce alone. Decades of strategic cooperation have created what both sides often describe as a form of political brotherhood, making it unclear whether New Delhi would be willing to abandon that partnership.
India’s position also carries broader implications. While Indian exports may not occupy the same strategic niche as China’s semiconductor supply chains, they remain important to global markets. Any disruption could have ripple effects. Recent developments involving Greenland, Europe, and India’s evolving ties with Germany and other European powers could further complicate sanctions decisions. The result is a deeply interconnected and uncertain landscape, one that underscores how complex the global economic and political order has become.
