India’s oil import basket witnessed a major reshuffle in August 2025 as purchases of Russian crude surged to 2 million barrels per day (bpd), while imports from Iraq declined sharply to 730,000 bpd. This marks one of the largest monthly volumes of Russian oil ever imported by India, highlighting the country’s growing reliance on discounted Russian barrels amid shifting global energy dynamics.

Surge in Russian Crude Imports

The rise in Russian oil imports reflects India’s cost-driven strategy. Following Western sanctions on Moscow, Russian crude has been trading at discounted prices compared to Middle Eastern grades, making it highly attractive for Indian refiners. In August 2025, this translated into record purchases, with Russia consolidating its position as India’s largest crude supplier.

Industry officials noted that Indian refiners, including state-run and private oil companies, increased intake from Russia due to favourable shipping logistics and pricing terms. The imports also included a higher volume of Urals crude and ESPO blends, which fit well with India’s refining capabilities.

Decline in Iraqi Oil Supplies

The increase in Russian flows came at the expense of Iraq, which has traditionally been one of India’s top oil suppliers. In August, Iraqi supplies fell to just 730,000 bpd, a significant drop compared to earlier months. Market analysts suggest this decline could be due to higher OPEC production cuts, tighter supply availability, and competition from cheaper Russian barrels.

Iraq’s share in India’s import mix has steadily decreased since 2022, when Russian crude began entering Indian refineries in larger volumes. The latest figures further underline how price competitiveness is reshaping India’s energy sourcing strategy.

India’s Energy Strategy and Global Context

India, the world’s third-largest oil importer and consumer, relies on imports to meet more than 85% of its crude demand. With rising domestic energy needs, India has consistently sought to diversify its supply sources. However, the sharp pivot towards Russia underscores a new era in India’s energy diplomacy, where economic pragmatism is driving purchase decisions.

Global oil dynamics are also shifting. As Western countries scale down Russian purchases, countries like India and China have emerged as major buyers. This has not only supported Russian revenues but also enabled India to secure oil at competitive rates, cushioning the impact of volatile global prices.

Impact on Refiners and Domestic Market

For Indian refiners, Russian crude offers both economic and operational advantages. With lower purchase costs, companies like Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), and Reliance Industries are able to protect margins and supply refined products to both domestic and export markets more competitively.

However, experts caution that overdependence on Russia could expose India to geopolitical risks. Any tightening of sanctions, disruption in shipping routes, or payment restrictions could impact flows, forcing refiners to rebalance towards Middle Eastern suppliers.

Future Outlook

With August data reflecting a record intake, analysts expect Russian supplies to remain a strong part of India’s import mix in the coming months. At the same time, New Delhi is expected to maintain ties with traditional suppliers like Iraq, Saudi Arabia, and the UAE to ensure supply security.

The long-term strategy remains focused on energy diversification, renewable investments, and domestic exploration, but in the short term, discounted Russian barrels are proving too lucrative to ignore.

India’s 2 million bpd purchase of Russian oil in August 2025 thus marks a defining moment in its energy trade, underscoring the balancing act between economic benefits and geopolitical challenges in the global oil market.

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