3 months ago
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India continued its strategy of reducing Russian lipid imports and alternatively sourcing much from the Gulf countries and the U.S. successful January 2026 arsenic well, the latest authoritative information shows, with Russia’s stock successful India’s lipid imports falling to little than 20% for the archetypal clip since May 2022.
However, events implicit the past week could render this strategy costly for India. A imaginable commercialized woody with the U.S. — allegedly the main crushed for India reducing inexpensive Russian lipid imports — is successful limbo pursuing the U.S. Supreme Court’s February 20 determination striking down that country’s reciprocal tariffs.
Further, lipid supplies from the Gulf and the U.S. are presently astatine hazard pursuing the struggle with Iran that started connected February 28. Oil prices, too, person started rising sharply.
Cutting backmost connected Russian oil
An investigation of the latest preliminary information from the Ministry of Commerce and Industry shows that India imported $1.98 cardinal worthy of crude lipid from Russia successful January 2026, the period earlier India and the U.S. issued a associated connection astir an interim commercialized statement betwixt the 2 countries. This was besides the lowest successful 44 months.
With this, Russia’s stock successful Indian lipid imports fell to 19.3% successful January 2026, the lowest since December 2022. For context, Russia’s stock was 27.5% 2 months earlier, and 33% successful May 2025.
While the Indian authorities has maintained that it decides connected its vigor sourcing based connected autarkic strategical and vigor information considerations, the U.S. medication has repeatedly linked the lowering of tariffs connected Indian imports and the commercialized woody with India’s cutting down of lipid imports from Russia and expanding them from the U.S.
Costly decision
Notably, connected February 6, U.S. President Donald Trump lowered tariffs connected Indian imports from 50% to 25% by removing the 25% penal tariffs helium had imposed successful August 2025 linked to India’s acquisition of Russian oil. He said this relaxation was due to the fact that “India has committed to halt straight oregon indirectly importing Russian Federation oil, [and] has represented that it volition acquisition United States vigor products from the United States”.
However, the U.S. Supreme Court has present struck down the ineligible mechanics by which Mr. Trump imposed these tariffs. This means that these tariffs would person been removed adjacent if India had continued its erstwhile levels of Russian lipid purchase.
The determination to displacement distant from discounted Russian lipid could beryllium costly for India arsenic the existent struggle successful West Asia has already pushed up planetary lipid prices by much than 8% to hover astir the $80 a tube people arsenic of mid-day March 2.
“Every $1 summation successful crude raises India’s yearly import measure by astir $2 billion,” JM Financial Services said successful a note. “Prolonged tensions whitethorn summation logistics and marine security costs, disrupt Gulf shipping routes and unit the commercialized balance.”
Further, expanding supplies from much distant countries similar the U.S. — which saw its stock successful India’s lipid imports summation to 6.8% successful January 2026 from 5% a twelvemonth earlier — means Indian refineries would person to wage higher freight charges, adding to their costs.
Disrupted supplies from the Gulf
Even arsenic it lowered lipid supplies from Russia, India either retained proviso levels from the Gulf countries oregon has accrued them. About 16.6% of India’s lipid imports successful January 2026 came from Iraq, astir the aforesaid level arsenic a twelvemonth earlier. The UAE accounted for different 10.4% of India’s lipid imports successful January 2025.
Saudi Arabia saw its stock of Indian lipid imports leap to 17.5% successful January 2026, the highest it has been since April 2023. Similarly, Kuwait’s stock grew to 6.1%, the highest since February 2023.
However, with Iran having closed the important Strait of Hormuz, supplies of lipid from each of these countries to India are astatine risk.
“The struggle besides complicates matters for India, which imports ample amounts of Middle East lipid and has agreed to upwind down purchases of Russian lipid arsenic portion of a commercialized woody with the U.S. — a woody which present sits successful limbo aft the U.S. Supreme Court struck down U.S. President Donald Trump’s country-based tariffs,” Moody’s Analytics said successful a report.
