India imports roughly 80% of its petroleum requirements. While its imports are largely confined to crude oil and other hydrocarbons, it is also a large exporter of refined petroleum products. The geopolitical disruptions in the last few years have inflicted multiple disruptions on India’s energy trade. The Trump administration announcing a 60-day waiver in implementation of its proposed punitive action on Russian oil trade – it entails a 100% tariff on countries importing Russian oil – is a good occasion
India’s imports of Russian petroleum are a legacy of the Russia-Ukraine war
Self-proclaimed friends of Ukraine have been making a big issue out of India’s import of Russian crude oil since the war started. While India has had a historical relationship with Russia on things such as military purchases, its oil trade with Russia was non-existent before 2022. Geography mattered more than geopolitical chemistry between the two old friends. India has always preferred to buy its energy supplies from West Asia, which is closer than Russia is. The economics changed after European countries stopped buying Russian energy after the Ukraine war and India diversified to buying from Russia. The Biden administration approved of this tactical maneuvering by India in the international energy markets.
What the Ukraine war did was a rejig in fossil fuel supplies without really changing overall trade
The Russia-Ukraine war did disrupt energy markets in the world. But the disruption was more a rejigging of trading lines than a squeeze on overall trade. Data from the Organisation of Petroleum Exporting Countries (OPEC) shows this clearly. Overall export of crude oil by major exporters did not really change after the Ukraine war. What happened was countries changing their trading partners; Europe shifting away from Russia and countries such as India and China increasing their Russian purchases. To be sure, India also helped European countries outsource their guilt, by selling them refined petroleum products, part of which must have come from India’s imports of Russian crude.
The Russia-Ukraine war started in February 2022. Crude oil prices jumped in its immediate aftermath crossing the $100 per barrel threshold in March-August 2022 period in terms of spot prices. However, prices came down quickly and were back to pre-war levels by December that year. Average monthly Brent spot and front month futures price – the global benchmark for crude oil price – stayed below $90 per barrel in 37 and 38 out of 39 months between December 2022 and February 2026. On 28 February 2026, the US and Israel launched an attack on Iran, which was followed by Iran shutting maritime traffic in the Strait of Hormuz. Crude oil price crossed the $100-mark in March, fell below this level after a cease-fire agreement between US and Iran in June, but has jumped back since the hostilities restarted.
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