India has agreed to phase out its imports of Russian crude oil and replace them with US and Venezuelan crude, according to US officials
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Moody’s Analytics has emphasised that turning away from Russian oil will push up domestic energy prices. However, an immediate halt of the geopolitically-sensitive commodity by New Delhi “appears infeasible” in near term.
In a commentary on Sunday, the financial intelligence provider pointed out that while the interim trade agreement goes some way to alleviate stress on Indian exports, there are plenty of unknowns.
It also stressed that lack of details of the interim trade deal means that the US-India relationship is far from repaired.
India has agreed to phase out its imports of Russian crude oil and replace them with US and Venezuelan crude, according to US officials. Indian officials have not confirmed that statement, but major refineries have reduced purchases of Russian crude in recent months, it added.
Russian crude oil
India imports more than 30 per cent of its domestic energy needs from Russia, so a pivot away from Russian crude will be pricey, Moody’s Analytics pointed out.
Crude grade differences could force many Indian refineries, optimised for Russian blends, to bear higher processing costs. Also, the EU’s latest price cap of $44.1 per barrel on Russian crude means that Urals crude will remain cheaper than US or Venezuelan supplies, it added.
“A shift will prompt higher domestic energy costs. That will feed through to domestic fuel prices, but also to the fiscal balance, given India’s extensive fuel subsidies. While some substitution is possible, full replacement of Russian crude appears infeasible in the near term,” it stressed.
Far from repaired
The deal with the US comes as India looks to forge other relationships amid the volatile trade environment. In the wake of the recently signed trade pact with the EU, Modi has been embarking on a tour around Southeast Asia, affirming ties with key countries in the region.
“The US deal appears to plaster over their recent breakdown in relations, but the lack of details means that the US-India relationship is far from repaired,” Moody’s said.
India’s commitments under the agreement appear more significant, it added.
For instance, the White House fact sheet noted that India intends to buy more than ‘$500 billion of US energy, information and communication technology, coal, and other products.’
“For context, India’s Union Budget for the financial year to March 31, 2027 had total expenditure of around $590 billion. The purchase requirement would amount to a significant proportion of fiscal spending, even if spread over years,” it explained.
Published on February 15, 2026
