India’s Russian Oil Imports Hit 10-Month High in May 2025

In May 2025, India’s imports of Russian crude oil reached a 10-month high of 2.1 million barrels per day (bpd), driven by discounted prices and global supply dynamics. This surge, accounting for 42% of India’s oil imports, highlights the country’s balancing act between energy security and sustainability goals. The trend raises questions about India’s reliance on fossil fuels amid efforts to scale renewable energy and EVs.

India, the world’s third-largest oil consumer, imported 5 million bpd in 2024, with Russia overtaking Saudi Arabia as its top supplier since 2022 due to sanctions-induced discounts. In May 2025, Russian oil imports rose 15% year-on-year to 2.1 million bpd, valued at $10 billion, as refiners like Reliance Industries and Indian Oil capitalized on prices 10–15% below Brent crude. The increase reflects OPEC+ production cuts and geopolitical shifts, with Russia redirecting exports to Asia after Western sanctions.

Economically, the imports save India $2 billion annually in foreign exchange compared to market-priced oil, supporting energy affordability in a country where fuel costs impact 60% of household budgets. Refineries, operating at 95% capacity, benefit from stable supplies, producing 250 million metric tons of refined products in 2024, with 20% exported to Europe and Africa. However, the reliance on Russian oil complicates India’s net-zero emissions target by 2070, as transport and industry account for 50% of emissions.

India’s sustainability efforts, such as the ethanol blending program adding 1,000 crore liters of biofuel capacity, aim to reduce oil dependency. The EV sector, bolstered by Tesla’s Mumbai warehouse lease, targets 30% penetration by 2030, but the EV cab sector’s slowdown highlights infrastructure challenges. Russian oil’s low cost undermines biofuel and EV adoption, as diesel remains ₹10 cheaper per liter than ethanol blends. Environmentally, the imports contribute 300 million metric tons of CO₂ annually, offsetting gains from renewable energy investments targeting 500 GW by 2030.web:previousweb:previous

Globally, India’s import strategy aligns with energy security priorities, similar to Japan’s methanol-powered tanker initiative, which balances fossil fuel transport with emission reductions. However, reliance on Russian oil risks diplomatic tensions, as Western nations push for reduced Russian energy trade. India maintains a neutral stance, leveraging BRICS partnerships to secure supplies while investing in renewables. Critics argue that over-reliance on discounted oil delays the green transition, but defenders highlight the necessity of affordable energy for India’s 7% GDP growth target.web:previous

The government is addressing this through policies like the PLI scheme, encouraging domestic clean energy manufacturing, and a $2 billion investment in green hydrogen by 2027. Refiners are also exploring carbon capture, though U.S. cancellations of $3.7 billion in CCS grants highlight global funding risks. India’s diversified approach, combining imports with renewable scaling, aims to balance immediate energy needs with long-term sustainability.

Conclusion

India’s record-high Russian oil imports in May 2025 ensure energy affordability but challenge its sustainability goals, highlighting the need for balanced energy policies. Investments in biofuels, EVs, and green hydrogen are critical to reducing fossil fuel reliance while maintaining economic growth.

Source: Outlook Business,