India has cut Russian oil imports, but not because of Trump’s threats
20 August 11:14
India significantly reduced its imports of Russian oil in July after a jump the previous month. However, this was not due to fears of powerful secondary sanctions from the US. According to trade sources, the reasons were smaller discounts on Russian crude and the traditional drop in demand for fuel during the monsoon season, "Komersant Ukrainian" reported, citing Reuters.
Russian oil imports by the world’s third-largest oil importer and consumer amounted to 1.5 million barrels per day in July, down 24.5 percent from the previous month, official data showed.
Experts predict a further slowdown in Russian supplies in August and September as India’s state-owned refineries suspended purchases of Urals crude due to narrowing price discounts. And US President Donald Trump’s warnings and threats were only an additional factor.
Private companies dominate Russian imports
Private refiners – Reliance Industries, Russia-backed Nayara Energy and HPCL-Mittal Energy Ltd – accounted for about 60% of India’s Russian crude oil imports in July, while the rest came from state-owned companies.
Russia accounted for 34% of India’s total oil imports of 4.44 million barrels per day in July. At the same time, India’s total oil imports in July were the lowest since September 2023.
Russia maintained its position as India’s top oil supplier, ahead of Iraq and Saudi Arabia.
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Reliance cuts Russian purchases
The decline in Russian imports is partly due to the decision by Reliance – operator of the world’s largest refinery complex – to cut its purchases by 19% in July from the high base of the previous month.
State-owned refiners have already shifted to alternative supplies from the Middle East and the US to replace Russian crude in August and September.
At the same time, the share of OPEC, predominantly Middle Eastern producers, in total Indian imports rose to a five-month high in July.
Annual dynamics and geographic diversification
Over January-July, India’s imports of Russian crude fell 3.6% to 1.73 million barrels per day, while US purchases rose 58%.
Notably, July marked the first time since 2011 – when Reuters began compiling the monthly statistics – that India completely stopped importing oil from Latin America.
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How to hurt russia over oil
Russia is known to be critically dependent on its energy exports. First of all – on oil exports. In 2024, Russia’s federal budget revenues from oil sales amounted to 9.19 trillion rubles (approximately $89.4 billion). Total budget revenues for this period amounted to 36.71 trillion rubles. Thus, the share of oil revenues in the total structure of Russia’s budget revenues in 2024 was approximately 25%
This shows that despite international sanctions and attempts to diversify revenue sources, oil remains a key source of financing for the Russian budget.
Russian Urals oil is traditionally sold cheaper than Brent and WTI grades, and it is also under pressure from additional factors not experienced by crude from other countries, namely Western sanctions. However, during the three years of full-scale war with Ukraine, Russia has been successfully selling its oil – its main buyers today are China and India.
The federal budget of the Russian Federation for 2025 included an oil price of $70. However, according to the Ministry of Finance, on August 18, the price of Russian Urals was $63.15 per barrel. Against this background, the deficit of the Russian state budget has already amounted to 4.88 trillion rubles, or 2.2% of GDP, of which more than a trillion has accrued over the past month. This hole in the treasury is almost 4.5 times higher than in the same period of 2024, when the deficit amounted to 1.1 trillion rubles, or 0.5% of GDP.
So far, the forecasts of market analysts do not promise Russia serious problems related to the price of oil, because it still has a very large backlash to sell. According to economic expert Oleg Pendzin, even the price of 50 dollars per barrel is still acceptable for Russia.
“Now the direct cost of production of Russian oil is about 37-38 dollars per barrel. This is the direct cost of production. The critical figure for rf is the figure of sales at the level of 45 dollars.”
– explained the economist exclusively for .
Therefore, the more likely way to hurt Russia over oil is still strengthening sanctions, including secondary sanctions against its buyers. The point of this move is to make it physically impossible for Russia to sell large volumes of oil and get funds from it to continue waging an aggressive war of conquest.
