India's biggest private refiner quietly pulls away from Russian oil purchases

India’s entire energy equation has been changed forever. Reliance Industries, the country’s biggest private refiner, is quietly pulling away from Russian oil purchases, a direct fallout from new sanctions imposed by the United States on Rosneft and Lukoil.

Just as Russia became one of India’s most critical oil suppliers, Donald Trump’s administration is turning the screws on Moscow’s top energy companies. And Reliance is stuck in the middle of it.

The numbers speak for themselves. In September alone, Reliance brought in nearly 630,000 barrels of Russian crude oil daily from Rosneft and Lukoil. That made up a huge chunk of India’s total 1.6 million barrels per day of Russian oil imports that month.

Just a year ago, Reliance was lifting 428,000 barrels a day. And a couple years before that, Russian oil barely registered, less than 3% of India’s total imports.

Today, it’s one-third of the national supply. Now the whole setup is unraveling, and Reliance has gone radio silent. They’ve declined to comment on the reports.

U.S. sanctions force Reliance to walk away

The Treasury Department rolled out sanctions on Wednesday, accusing Moscow of having “a lack of serious commitment” to ending the war in Ukraine.

While no company has been directly targeted outside Russia, the pressure is crystal clear. Indian refiners are getting the message. Pankaj Srivastava, senior VP at Rystad Energy, said if Reliance drops Russian crude, “it will have negative impacts on [its] margin and profitability as Russian crude constitutes more than 50% of [its] crude diet.”

Srivastava also pointed out that while replacements are technically available, from West Asia, Brazil, or Guyana, the costs won’t be nearly as good.

Reliance had long-term supply deals with Rosneft, and those barrels came at serious discounts. Finding oil that fits technically isn’t the issue, it’s the price that’ll bite.

In fact, last December, Reliance locked in a 10-year deal with Rosneft worth $12 to $13 billion annually, tied to volumes around 500,000 barrels per day. That contract is now in limbo.

Muyu Xu, senior crude oil analyst at Kpler, says the change won’t be smooth. “Given the large volumes under the Reliance-Rosneft deal, we expect some short-term friction for Reliance in securing replacement barrels,” she said.

Xu noted that Russia’s Urals grade still trades at around $5–6 cheaper per barrel than similar-quality Middle Eastern crude, meaning Reliance’s bottom line takes a hit no matter where it turns next.

Financial fallout triggers trade opportunity with U.S.

Vandana Hari, founder of Vanda Insights, called the entire Russian oil strategy “opportunistic buying” based purely on price. In September, India scooped up 38% of Russia’s global crude exports, second only to China’s 47%, based on figures from the Centre for Energy and Clean Air.

But now, even Hari says India can adapt. Refineries can switch barrels, though she warned “the trade-off is pressure on refining margins.”

Brokerage firm Jefferies believes the impact is real but limited. In a note from September, they told investors that even if Reliance halts Russian imports entirely, the damage is “manageable.” They estimated Russian oil contributes 2.1% of Reliance’s expected ₹2.05 trillion ($22.8 billion) in EBITDA for fiscal 2027.

That margin matters when every dollar counts. For the first half of fiscal 2026, Reliance reported ₹1.08 trillion ($12.3 billion) in total EBITDA, with ₹295 billion from its oil-to-chemicals segment. Its telecom and retail arms brought in close to ₹500 billion combined.

Other Indian refiners are following suit. Everyone’s pulling away from Russia’s barrels. That means India’s import bill could rise, but Hari said it won’t be “as big a sticker shock” because WTI crude is sitting around $61.83 per barrel, far from the $70–$80 range seen earlier.

Some experts believe ditching Russian oil is worth the trade. Trinh Nguyen, senior economist at Natixis, said the arbitrage advantage from Russian crude is fading, especially now that the global energy crisis has cooled. In her view, India no longer needs to depend heavily on Moscow.

There’s also the geopolitical bonus. India’s tight relationship with Russian oil had become a thorn in its dealings with Washington. Tensions peaked when Trump’s administration imposed a total 50% tariff on Indian goods going into the U.S.

But now, with both state-owned and private refiners turning off the Russian tap—something Trump has pushed for since his first term—the odds of India landing a real, favorable trade deal with the U.S. just got better.

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