If India stops buying Russian oil, what it could mean for Moscow’s revenues — explained
Russia could face a sharp drop in oil revenues if US President Donald Trump succeeds in pushing India to scale back or halt purchases of Russian crude, potentially forcing Moscow to cut prices to attract alternative buyers, analysts and traders told Reuters.The development comes after Trump said a recent US-India trade deal included provisions linked to India halting Russian oil imports, even as Washington increases pressure on Moscow amid ongoing Ukraine peace negotiations.
India has not officially halted purchases, citing energy security needs and the importance of access to cheaper crude. However, recent data indicates Indian refiners have adopted a more cautious approach, already affecting Russia’s earnings.According to Reuters calculations, India’s imports of Russian oil fell 22% to 1.38 million barrels per day in December from November — the lowest level since January 2023. Russia’s share in India’s oil imports dropped to 27.4%, while OPEC’s share rose to 53.2%. This follows a peak of nearly 2 million barrels per day in June 2025.“Any further reduction would already be meaningful, because there is only one relevant alternative buyer — China — which has also its limitations in taking in sanctioned crude,” David Wech of Vortexa consultancy told Reuters.Analysts said widening discounts and shrinking buyer pools are already pushing Russian oil prices to record lows, while Moscow’s budget is facing strain due to weaker energy revenues.
Sanctions pressure and supply re-routing risks
Russia has faced nearly 30,000 Western sanctions linked to the Ukraine war since 2014 but has managed to redirect oil flows from Europe towards China, India and Turkey. However, Turkey has also reduced purchases in recent months.Russia’s total oil exports stood at 4.91 million barrels per day in December, with China accounting for about 2.3 million barrels per day, according to the International Energy Agency.If India were to sharply cut imports, Russia would likely need to divert supplies to China at deeper discounts or cut production, said Igor Yushkov of Russia’s government-run Financial University.“Output and export cuts would lead to an oil shortage. Hence we are not seeing a full US ban on Russian oil imports — they would suffer themselves from higher oil prices,” Yushkov said.
Short-term flows may fall further
Indian refiners have not received formal instructions to stop buying Russian oil and would require time to wind down existing contracts, sources told Reuters.Imports could decline further in April when Nayara Energy, a Russian-backed refinery with capacity of 400,000 barrels per day, undertakes scheduled maintenance for one month, traders said.Beyond April, trade flows will likely depend on the trajectory of Russia-Ukraine peace talks and India’s broader strategic stance.Trump has suggested India could increase purchases from the US or Venezuela to replace Russian crude. However, US crude differs in quality and cannot directly substitute Russian grades, while Venezuela’s export capacity remains limited, Alexandra Hermann of Oxford Economics told Reuters.Instead, crude from Saudi Arabia, the UAE and Iraq may emerge as more practical alternatives. However, analysts said steep discounts may continue to make Russian oil attractive for Indian buyers despite geopolitical pressure.
