India significantly reduced its purchases of Russian hydrocarbons in December, signalling a cooling in the aggressive buying that had defined bilateral energy trade over the past two years. According to data from the Centre for Research on Energy and Clean Air (CREA), India’s total imports of Russian crude oil, refined fuels, coal and gas were valued at €2.3 billion in December, down from €3.3 billion in November, marking a steep month-on-month decline.
The fall reflects a combination of weaker demand, softer global prices and increasingly complex trade and logistics conditions surrounding Russian energy exports. Indian refiners had sharply increased imports of Russian crude after Moscow began offering deep discounts in the wake of Western sanctions, enabling India to replace higher-cost supplies from the Middle East and Africa. However, December’s data suggests that this trade is becoming more sensitive to market dynamics and policy-related risks rather than being driven purely by price advantages.
One of the key factors behind the decline was lower crude oil prices in December, which reduced the overall value of imports even where physical volumes may have remained relatively stable. In addition, some refiners appear to have slowed fresh purchases after building substantial inventories in previous months. Seasonal refinery maintenance and weaker fuel demand across parts of Asia also contributed to more cautious buying.
Sanctions-related complexities have further weighed on trade flows. While India is not party to Western sanctions on Russia, tighter scrutiny of payments, shipping insurance constraints and uncertainty over compliance have raised transaction costs and operational risks. This has made Indian buyers more cautious, particularly in spot markets and for non-core Russian grades.
The decline also points to a gradual diversification of India’s energy sourcing. As discounts on Russian oil narrowed, refiners found Middle Eastern and US supplies more competitive again, especially for specific grades needed to optimise refinery operations. While Russia remains one of India’s largest energy suppliers, reliance on Russian barrels has eased at the margin.
From a broader perspective, the drop in imports highlights a shift in India’s energy strategy—from opportunistic, discount-driven buying toward a more balanced approach that weighs geopolitical risks, freight costs and compliance concerns alongside price. Discounted Russian oil has played a crucial role in containing India’s import bill and inflation over the past two years, but refiners are now adapting to a more complex global energy environment.
For Russia, the December decline underscores the vulnerability of its energy export revenues in key Asian markets. With Europe sharply reducing purchases, India and China have become critical outlets for Russian hydrocarbons. Any sustained slowdown in Indian buying could increase pressure on Moscow to offer deeper discounts or identify alternative buyers.
Overall, the fall in imports from €3.3 billion in November to €2.3 billion in December marks a notable cooling in India’s Russian energy trade at the end of 2025, driven by softer prices, cautious procurement and shifting global energy flows rather than a fundamental rupture in bilateral ties.
