Finance
Exclusive-Indian refiners buying prompt Russian oil as iran war hits supplies, sources say
Published by Global Banking & Finance Review®
Posted on March 5, 2026
3 min readLast updated: March 5, 2026
Quick Summary
Indian refiners are sharply increasing purchases of prompt Russian crude amid a supply squeeze triggered by the Middle East conflict and Iran war, even as U.S. pressure had earlier reduced such imports.
Indian Refiners Ramp Up Russian Oil Imports Amid Middle East Conflict and Supply Crunch
India's Strategic Shift in Oil Sourcing
By Nidhi Verma and Jarrett Renshaw
Background: Middle East Conflict and Oil Supply Crunch
NEW DELHI/WASHINGTON, March 5 (Reuters) - Indian refiners are buying millions of barrels of prompt Russian crude oil cargoes as the South Asian nation seeks to navigate an oil supply crunch triggered by the Middle East conflict, six sources familiar with the matter said.
For months, the U.S. has pressured New Delhi to avoid buying Russian barrels as Washington seeks to reduce money flowing to Moscow's war effort in Ukraine.
India's Vulnerability to Energy Shocks
India is vulnerable to energy supply shocks, with crude stocks covering only about 25 days of demand. India gets about 40% of its oil imports from the Middle East through the Strait of Hormuz.
Impact of U.S. Pressure and Trade Dynamics
India was the top buyer of Russian seaborne crude after Moscow's 2022 Ukraine invasion, but in January, its refiners started to reduce purchases under pressure from Washington.
Cutting Russian oil purchases helped New Delhi avoid 25% tariffs and clinch an interim trade deal with the U.S.
Uncertainty Over U.S. Approval
It is unclear whether the United States has allowed India to increase Russian purchases to offset potential Middle Eastern supply losses.
Diplomatic Communications
A source directly invloved with the matter said India had approached U.S. President Donald Trump's administration seeking approval to buy Russian crude imports due to the Iran conflict.
India's oil and foreign ministries did not respond to Reuters emails seeking comments. The White House and the U.S. Treasury Department did not immediately respond to requests for comment.
Refiners' Actions and Market Response
State refiners Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd are talking to traders for prompt delivery of Russian cargoes, according to the Reuters sources.
Volume and Pricing of Russian Oil Imports
One of the sources said Indian state refiners have bought about 20 million barrels of Russian oil from traders so far.
HPCL and MRPL last received Russian oil in November, according to data obtained from industry sources.
The traders are selling Russian Urals to India at a premium of $4-$5 per barrel to Brent on a delivered basis for arrival at Indian ports in March and early April, three of the sources said.
Price Fluctuations and Market Trends
This is in contrast to a discount of about $13 per barrel for cargoes traded in February, traders said.
HPCL had bought two cargoes of Russian oil at a $13 discount before the war started on February 28.
Refiners' Strategies and Market Adaptation
"India refiners are back in the market...nowadays more than prices, availability of molecules is the issue," said one of the traders involved in Russian oil sales to India.
This source said Reliance Industries also approached his company for purchase of prompt Russian oil cargoes.
Refiners in India had already started tapping Russian oil aboard vessels floating off the country's coast to make up for the loss of Middle Eastern crude, two sources with direct knowledge of the matter said earlier in the day.
Indian refiners did not immediately respond to Reuters emails sent out after business hours.
(Reporting by Nidhi Verma in New Delhi and Jarrett Renshaw in Washington; Editing by David Gregorio)
Key Takeaways
- •India’s crude dependency on Middle Eastern routes via the Strait of Hormuz is high—roughly 50–55% of imports transit through it—making supply security a major concern as the Iran conflict escalates.
- •U.S. pressure had led India to curb Russian oil buys, helping secure a trade deal and avoid tariffs; now refiners are returning to the Russian spot market for immediate cargoes.
- •Despite earlier reductions, India is now negotiating to secure around 20 million barrels of prompt Russian crude, with prices tightening from a $13 discount in February to only a $4–5 premium to Brent for March–April delivery.
Frequently Asked Questions about Exclusive-Indian refiners buying prompt Russian oil as Iran war hits supplies, sources say
1Why are Indian refiners buying more Russian oil?
Indian refiners are increasing Russian oil purchases to offset a supply crunch caused by the Middle East conflict affecting oil imports.
2How much Russian crude have Indian refiners recently bought?
Indian state refiners have bought about 20 million barrels of Russian oil from traders so far.
3What is the impact of the Iran war on India's oil supply?
The conflict has disrupted Middle Eastern oil supplies, prompting India to seek alternative sources like Russian oil.
4How have crude oil prices changed for Indian buyers?
The price for Russian Urals has shifted from a $13 discount to Brent in February to a $4-$5 premium per barrel for deliveries in March and April.
5Has the US responded to India's increased Russian oil imports?
It is unclear if the US has officially allowed India to increase Russian oil purchases, and US officials have not commented.
