Russian Oil Imports To India Skyrocket, Growing At 96% CAGR Over 5 Years: Report

This trend is largely attributed to competitive pricing and alternative transport corridors that bypass high-risk zones such as the Strait of Hormuz

The government is also pushing upstream reforms under the Hydrocarbon Exploration and Licensing Policy

Source : Freepik

India’s oil and gas industry is navigating a major realignment as global energy dynamics continue to evolve, driven by shifting international alliances, economic sanctions, and increasing geopolitical friction. According to the latest Rubix Industry Insights report, a significant transformation is underway, with Russian crude now accounting for approximately 35 per cent of India’s oil imports in FY25—up dramatically from just 2 per cent in FY20. This surge has been accompanied by an impressive 96 per cent compound annual growth rate (CAGR) in the value of Russian oil imports over five years.

This trend is largely attributed to competitive pricing and alternative transport corridors that bypass high-risk zones such as the Strait of Hormuz. Meanwhile, India’s reliance on Middle Eastern crude has declined, leading to strategic and economic recalibrations.

Western Sanctions Prompt Export Safeguards

Amid intensifying Western sanctions against Russia, including proposed tariffs by the US and stricter EU policies, India is taking steps to secure its downstream petroleum product exports—valued at $44.4 billion in FY25. India now ranks as the seventh-largest exporter of refined petroleum, with major markets including the Netherlands, the UAE, and Singapore.

Growing Demand, Declining Production

India, the third-largest crude oil importer globally, is expected to see daily consumption rise from 5.64 million barrels in 2024 to 6.66 million barrels by 2030. However, domestic production is declining—from 32.2 MMT in FY20 to 28.7 MMT in FY25—raising the country’s import dependency to 88.2 per cent.

On the refining front, India currently boasts 257 MMTPA capacity across 23 refineries, ranking fourth globally. The government plans to scale this to 309.5 MMTPA by 2030, with investments led by state-owned enterprises such as IOCL, BPCL, and HPCL.

Natural Gas: Imports And Infrastructure Growth

India’s natural gas demand reached 71 billion cubic meters in FY25, with 50 per cent fulfilled through LNG imports. The United States has surpassed the UAE to become India’s second-largest LNG supplier, following the relaxation of US export restrictions and the signing of long-term supply agreements.

India aims to increase natural gas’s share in its energy mix to 15 per cent by 2030, supported by ongoing pipeline expansions and new regasification terminals.

Policy Reforms And Clean Energy Push

The government is also pushing upstream reforms under the Hydrocarbon Exploration and Licensing Policy (HELP). In its 10th round, 25 new blocks were offered, and a Special CBM Round focused on unconventional gas. Regulatory updates are expected to draw more domestic and foreign investment.

Clean energy initiatives are also gaining momentum. The Pradhan Mantri Ujjwala Yojana (PMUY) has expanded LPG coverage to over 103 million households, and ethanol blending has already achieved the 20 per cent target—six years ahead of schedule. Additionally, city gas distribution networks are being extended to cover 70 per cent of India’s population.

Key Risks Still Loom

Despite these advances, the report cautions against ongoing risks. Crude price instability, sanctions on Russian oil, and lagging domestic output continue to pose serious challenges. Refinery expansion projects are behind schedule, and tensions in the Middle East threaten critical supply routes.