Record oil imports reflect strong refinery runs, flexible Russian buying

Higher ship-to-ship transfers helped move more crude through the Strait of Hormuz, supporting a recovery in Gulf supplies during September and October and giving Indian refiners greater flexibility in sourcing. Russian shipments could moderate in November and December as attacks in the Black Sea push up freight rates, making those barrels less competitive on a landed-cost basis. At the same time, Gulf suppliers are offering competitive delivered prices to regain market share in India, Dubey said.

However, any renewed disruption to flows through the Strait of Hormuz could prompt Indian refiners to return to Russian crude, even if transportation costs rise. The October 16 waiver under the Graham Act could also ease concerns among some Indian buyers about the risks associated with purchasing Russian oil, giving refiners greater flexibility in procurement, he said. India imports nearly 90 per cent of its crude oil requirements, making the availability and landed cost of alternative supplies critical to refinery economics.

The choice between Russian and West Asian barrels is therefore likely to remain driven by commercial considerations and supply security rather than geopolitics alone. Russia's invasion of Ukraine in February 2022 upended global oil trade flows, prompting Western countries to impose sanctions, an EU ban on seaborne Russian crude and a G7 price cap. With European buyers shunning Russian oil, Moscow offered steep discounts to attract alternative markets, and India emerged as a major buyer, sharply increasing imports from negligible levels before the war to as much as 40-50 per cent of its crude basket at their peak.

Indian refiners were drawn by the price advantage, with Russian Urals at times trading around USD 30 a barrel below Brent in late 2022 and early 2023. The shift transformed Russia into one of India's largest crude suppliers, as refiners prioritised cheaper landed costs and supply security over Western pressure to curb purchases. Discounts have, however, almost vanished now, but the disruption in supplies from the Middle East has meant that Indian refiners stick to Russian barrels.

"Russian flows, which have held strong at these levels, could soften in November-December as attacks in the Black Sea push freight rates higher, making Russian barrels less attractive on a landed cost basis," Dubey said. "Meanwhile, the recovery in Hormuz flows through September-October has given Indian refiners more supply options, with Gulf suppliers offering competitive delivered prices to regain market share.

However, the situation remains volatile, and any renewed disruption to Hormuz flows could see refiners turning back to Russian barrels, even at higher freight costs. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.) Don't miss the most important news and views of the day. Get them on our Telegram channel First Published: Nov 01 2026 | 10:20 AM IST