Key Highlights
- India imported Russian fossil fuels worth €2.2 billion in January 2026, keeping its position as the world’s second‑largest purchaser.
- Crude oil accounted for roughly 78 % of the total spend, while coal and refined products formed the remainder.
- China’s imports surged, making it the single largest buyer of Russian oil for the month.
- Western sanctions, an EU‑imposed price cap and OFAC restrictions have begun to reshape India’s sourcing strategy.
- India is gradually diversifying its supply mix, with Saudi Arabia regaining market share.
Detailed Insights
According to the Centre for Research on Energy and Clean Air (CREA), India’s expenditure on Russian energy commodities in January 2026 amounted to €2.2 billion (≈$2.59 billion), a slight decline from the €2.3 billion recorded in December. The breakdown reveals that €2 billion was spent on crude oil, €442 million on coal, and €30 million on oil products. Despite a 23 % contraction in Russian oil purchases since November, India retained its status behind only China in the global ranking of Russian fossil‑fuel buyers.
China, by contrast, amplified its Russian oil intake by 29 % over the previous two months, reaching €4 billion in January alone. Chinese refiners doubled their acquisition of Urals grades, while imports of the ESPO grade remained stable, representing roughly 16 % of China’s overall oil imports.
Geopolitical pressures have begun to bite. The United States’ OFAC sanctions targeting Rosneft limited shipments to Indian refineries, and the European Union enforced a ban on refined products derived from Russian crude on 21 January 2026. An EU‑UK price ceiling of $44.1 per barrel took effect on 1 February, yet the average spot price for Russian Urals crude climbed 4 % in January to $54.2 per barrel, staying above the cap.
Operationally, India’s Jamnagar refinery – owned by Reliance Industries – missed a sea‑borne cargo of Russian oil in January because of the sanctions, though deliveries resumed in February. In terms of volume, India imported 1.2 million barrels per day (bpd) of Russian oil in January, with Saudi Arabia supplying 774,000 bpd. Projections suggest Indian imports from Russia could dip to 800,000 bpd by March, the lowest level since May 2022, as Saudi crude re‑enters the Indian refining slate.
Strategically, Indian policymakers appear to be pursuing three concurrent objectives: broadening the portfolio of crude sources, safeguarding long‑term energy security, and mitigating geopolitical risk while retaining the cost advantages offered by discounted Russian oil.
Key Concepts
- OFAC Sanctions: Economic measures imposed by the U.S. Treasury’s Office of Foreign Assets Control that restrict transactions with designated entities, such as Russia’s Rosneft.
- EU Price Cap: A regulatory ceiling of $44.1 per barrel introduced by the European Union and the United Kingdom to curb excessive oil price volatility.
- Urals Crude: A benchmark Russian export blend, traditionally shipped to Asian markets, whose price movements often influence global oil pricing.
- Energy Security: The ability of a nation to secure reliable, affordable, and sufficient energy supplies to sustain its economic activities.
- Supply Diversification: A strategic approach that spreads procurement across multiple origins to reduce dependence on any single supplier.