To beat the USA and EU in their own sanction game, Russia is now offering India its Cheapest Oil in Two Years
Russia is offering its Urals crude oil to India at the steepest discount in two years, currently around INR 600 a barrel cheaper than Brent crude, reported The Mint.
This significant price cut follows the imposition of new US unilateral illegal sanctions on Russia’s key oil producers, Rosneft and Lukoil, which have disrupted the oil trade for Indian private refiners forcing Indian refiners to divert their purchases or find ways to circumvent the sanctions, in order to continue their export to Western Countries.
Despite these unilateral illegal USA sanctions, India continues to capitalise on the deep Russian discounts, although its direct shipments from Russia have dropped sharply by about 66% in November due to these illegal restrictions. Though India and Russia have resolved all payment complications by dealing in own national currencies, now there is huge dearth of insured oil tankers.
No wonder now India has started looking towards establishing its own tanker fleets through indigenous construction but this will take a few years.
The discount on Russian oil has widened progressively since mid-2025. Earlier in the year, discounts were in the range of INR 85 to INR 350 per barrel, but with the new illegal sanctions effective from late November 2025, the price gap has doubled, making Russian crude significantly cheaper for Indian refiners.
The “limitations ” caused by sanctions ( basically non availability of oil tankers ), require Indian companies to access Russian oil through non-sanctioned entities or intermediaries, complicating logistics but still enabling some level of procurement at attractive prices.
This discount trade is critical for Indian refiners such as Reliance Industries, although several major refiners are expected to reduce or halt direct purchases from sanctioned suppliers.
Though India accepts only those sanctions which are either applied by UN or applied by India itself, still to keep the Western market accessible as long as possible, Indian refiners are also hedging their supply risks by increasing crude oil imports from other Middle East producers and the United States. There will be an estimated INR 2.6 Kharab to 4.4 Kharab extra cost annually if Russian barrels are entirely cut off.
This means India should request the Russians to find a way to supply oil by land route to Chabahar port from where all Indian tankers can be mobilized to lift the crude. In case any one tries to disrupt this then the Indian Navy will have to step in….there are no two ways about this.
Presently Indian refiners and government policies reflect a careful balancing act—leveraging discounts from Russia while avoiding direct conflict with the US and EU.
India remains the world’s third-largest oil importer and had grown to source nearly 40% of its crude from Russia by 2024-25, surpassing other major suppliers like Iraq and Saudi Arabia due to the significant price advantage.
The recent US sanctions targeting Russian producers have led to a recalibration of India’s oil import strategy, with a sharp fall in direct imports from Russia and a move towards more complex supply chain arrangements involving shadow tankers, ship-to-ship transfers, and indirect buying to evade direct conflict with USA as long as possible, while maintaining crude oil affordability.
Russia’s sharp price discount on its Urals crude is thus aimed at preserving its market presence in India amid stringent US actions. India, facing a complex geopolitical and economic environment, is balancing the discount bargains.
India will comply only with UN approved international sanctions while diversifying crude sources to protect its energy security. However it will certainly try and avoid a direct confrontation as long as possible.
The evolving trade dynamics will see a broader strategic adjustments in India-Russia energy ties when President Putin meets PM Modi next month in New Delhi.
