Indian Oil Corporation (IOC), India’s largest refiner, has purchased its first-ever cargo of Colombian crude, marking a notable step in diversifying away from Russian oil amid tightening Western sanctions and rising compliance risks. The state-run refiner has acquired 2 million barrels of Castilla Blend heavy sour crude from Colombia’s state-owned Ecopetrol for delivery in late February 2026, sources familiar with the deal said.
The purchase activates an optional supply agreement signed in late 2021 and renewed annually, which allows IOC to lift up to 12 million barrels depending on pricing competitiveness. While largely dormant until now, the framework provides IOC flexibility to hedge against geopolitical and supply risks without firm volume commitments.
The move comes as India’s Russian crude imports are projected to fall to a three-year low of about 1.2 million barrels per day in December 2025, down sharply from earlier peaks, according to Kpler data. Russian oil’s share in India’s crude basket is expected to drop to around 25%, the lowest since late 2022, as sanctions target major Russian producers, shipping, banking and insurance channels.
Narrowing discounts on Russia’s Urals crude, combined with additional U.S. duties linked to Russian energy trade, have reduced its attractiveness. Meanwhile, Middle Eastern and Latin American grades have become more competitive as suppliers cut official selling prices.
Castilla crude, a heavy sour grade well-suited to India’s complex refineries, offers IOC an alternative amid shifting market economics. The purchase highlights India’s gradual but strategic diversification push, even as Russia remains its largest single crude supplier.
