India’s imports of Russian crude fell 16.5% in August and are expected to decline again in September, just as a new US sanctions law gives Washington authority to hit major Russian oil buyers with tariffs of up to 100%.
Russian shipments to India dropped to about 2.1 million barrels per day in August from July’s record levels, according to trade data. Preliminary Kpler data puts September imports at 1.9 million bpd. Russia remains India’s largest crude supplier.
The August decline predates the new US law, so calling it a sanctions retreat would be a stretch. Indian refiners were already shifting barrels around as Middle Eastern supply routes improved. Purchases of Iraqi crude jumped roughly 25% to 171,000 bpd in August. Saudi imports rose 1.5% to 328,000 bpd. UAE shipments fell 5.4% to 620,000 bpd, although ADNOC has expanded its ability to move crude from inside Hormuz to export points outside the strait.
India’s total crude imports fell 8.8% in August to 4.44 million bpd.
October and November buying could tell a different story. Indian refiners are tapping spot markets for replacement barrels as they weigh the risk attached to future Russian purchases. President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act on Friday, giving the administration authority to impose tariffs of up to 100% on goods from qualifying major buyers of Russian energy. The law does not automatically impose those tariffs.
India also has a very expensive reason to shop carefully. Its crude import bill jumped 48.4% year over year to $74.8 billion between April and August even though import volumes slipped 0.4%. Higher crude prices and freight costs have eaten away at the savings India spent years extracting from discounted Russian barrels.
Russian crude still makes economic sense for Indian refiners, but the calculation gets considerably uglier if the discount on the oil comes attached to a potential tariff on everything else India sells to the United States.
