The latest threat from a proposed US law that intends to impose 500 per cent tariffs on countries purchasing Russian crude oil is unlikely to majorly impact Indian shipments during the current month.
Global real time data and analytics provider Kpler expects Indian crude oil imports during January 2026 to remain largely on last month’s cues—around 1.2 million barrels per day (mb/d).
“Looking ahead, the January 2026 outlook currently points to Russian inflows in the 1.2–1.3 mb/d range, although this remains fluid and continues to evolve with market and policy developments,” it added.
US President Donald Trump “greenlit” a bipartisan Russia sanctions bill, which threatens 500 per cent tariffs on countries buying Russian energy, including India, China, and Brazil. The development spooked markets on Thursday dragging down benchmark indices.
Tariff threat
Sumit Ritolia, Kpler’s Lead Research Analyst for Refining & Modeling, noted that India’s crude procurement has already started to rebalance, and the most recent data underscores the shift.
“Russian crude imports dipped in December to around 1.2 mb/d, the lowest level in nearly three years, reflecting tighter sanctions, logistics constraints, and growing trade uncertainty,” he told businessline.
Over the past year overall, India’s total crude oil imports rose by about 3 per cent Y-o-Y, but Russian volumes declined by roughly 3–4 per cent, with Moscow’s share easing from around 38 per cent to about 36, he pointed out.
“If the proposed US tariffs linked to Russian oil purchases were to become credible, the impact would be less about immediate supply disruptions and more about a shift in risk assessment,” Ritolia emphasised.
Russian crude remains attractive only as long as price discounts compensate for financing, insurance, and compliance risks. If that balance changes, refiners would naturally gravitate toward barrels from the Middle East, the US, and Africa that are easier to transact, even if they are more expensive, he explained.
A senior official said that currently the discount on Russia’s Urals grade is rising and is around $8-9 per barrel over Brent, which can rise further depending on how geopolitics and tariff negotiations work out.
Policy clarity
In any such scenario, stressed Ritolia, refiners are likely to await policy clarity and guidance from the Government of India (GoI) before recalibrating their import strategies.
“If purchases of Russian crude were to be curtailed significantly, India has adequate alternative supply options, with Middle Eastern grades able to replace volumes relatively quickly, supported by US and West African barrels,” he suggested.
However, the economic cost would be the loss of discounted crude. Within this landscape, Nayara Energy would face a larger adjustment challenge given its heavy reliance on Russian crude, making it a more sensitive case relative to other Indian refiners, Ritolia said.
“Overall, India’s response would remain pragmatic—focused on safeguarding energy security, managing trade and compliance risks, and adjusting sourcing decisions based on economics, geopolitics and policy directions from GoI,” he added.
Indian refiners would be able to tap alternative sources relatively quickly considering the majority of Russian crude India has been buying is medium-heavy sour, which is broadly comparable to grades available in the Middle East.
Besides, Indian refineries are among the most complex globally and are already designed to process a wide range of crude slates, so from a technical standpoint, substituting barrels is not a major constraint, Ritolia emphasised.
Published on January 9, 2026
