India's Russian crude imports fell 13% in September, yet fuel exports from Russian-crude refiners to sanctioning countries rose 43% in value.
NEW DELHI: Refineries in India, Turkiye and Brunei that run Russian crude shipped €1 billion ($1.2 billion) of oil products to countries sanctioning Moscow in September. That is a 43% jump from August, according to the Centre for Research on Energy and Clean Air (CREA). The measure tracks value and not volume and it spans all three countries. Meanwhile, India’s own imports of Russian crude fell 13% in the month, so the surge reflects prices and refinery sophistication more than extra barrels.
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India bought less Russian crude in September, its second straight monthly fall and the lowest level since April. It still ranked second among Russia’s fossil fuel buyers after China, spending €4.1 billion, of which crude made up 88%. Since December 2022, India has taken 37% of Russia’s crude exports against China’s 50%.
Behaviour differed by refiner. Reliance’s Jamnagar complex cut Russian runs by 27%, although Russian crude made up 32% of its intake from July to September. Nayara Energy’s Vadinar refinery cut 8% and overtook Jamnagar as India’s largest single importer. State-run refiners reduced more, with Paradip down 21% and Kochi down 32%.
Conversion
Complex refineries can blend. Jamnagar has a Nelson Complexity Index of about 21.1, and Vadinar also has hydrocracking, coking and desulphurisation units built for heavy sour grades such as Urals. Blended with Middle Eastern and Atlantic crude, those grades yield diesel and jet fuel that meet European and American standards.
Seven cargoes from refineries running Russian crude reached EU ports in September: three in Italy, two in Romania and one each in Spain and Cyprus. Jamnagar supplied six of them, including a 104,000-tonne gasoil cargo bound for Rotterdam. The EU took €667 million, up 80%. Australia took €168 million, the United States €154 million, of which Jamnagar supplied €122 million, and New Zealand €19 million. CREA estimates that only €295 million of the total came from Russian crude, and it relies on mass-balance modelling and not physical tracing.
Netback
Prices supported the trade. Urals averaged $90.70 a barrel, about $23 below Brent, which averaged $116.77 in September against $90.84 in August amid West Asia disruptions. Furthermore, European refinery maintenance and thin middle-distillate stocks widened margins, and the EU’s embargo on Russian products since February 2023 left a gap to fill. Those margins absorbed longer routes around the Cape of Good Hope and higher war-risk insurance.
On 16 October, the Finance Ministry cut the windfall levy on diesel exports from ₹16 to ₹8.5 a litre to keep exports competitive. It raised the petrol levy from ₹0.5 to ₹2.5 to guard domestic supply and left aviation fuel at ₹10.5.
Compliance
The rules sit in several places. Under customs norms, refining changes a fuel’s origin, so exports carry Indian origin. New Delhi says its purchases follow energy security needs and international frameworks. The EU’s January 2026 regulation bars products refined from Russian crude in third countries but exempts net crude exporters. CREA wants a refinery-level ban covering any refinery that processed Russian crude in the prior six months, though this remains an advocacy proposal and not law.
In Washington, the Graham Act allowed tariffs of up to 100% on the top buyers of Russian crude within a 30-day window ending 18 October. President Donald Trump issued a waiver before the deadline, and Secretary of State Marco Rubio called India an important strategic ally and stressed avoiding price shocks. US officials reportedly said that cutting third-country supply would push American diesel to record highs.
Residue
The oil bill tells the other half of the story. India’s crude import bill for April to September reached $90.6 billion, up 46.3% from $61.9 billion, and volumes rose only 0.7% to 122.7 million tonnes. The September basket averaged $116.09 and peaked at $130.19 on 15 September. Net oil and gas imports hit $13.4 billion, which is 40% higher.
Merchandise exports rose 23% to $44.4 billion, helped by refined products, and the trade deficit narrowed to $30.21 billion. However, retail inflation reached a 23-month high of 5.54%, and the Reserve Bank of India lifted its FY27 forecast from 5.0% to 5.2%.
Gauges to Watch
Several signals will show how long the arbitrage lasts. These include the Urals discount, freight and insurance costs, any EU move towards refinery-level rules and the renewal of the US waiver. Fortnightly windfall tax notices and monthly data from the Petroleum Planning and Analysis Cell will also matter. Two questions follow. Can private refiners redirect diesel to Asia and Africa if Europe tightens, and will state refiners buy more Russian crude if private ones step back?
Encouragingly, India’s refiners have shown the flexibility to serve tight global markets while the country manages its own supply. Ultimately, the next monthly tracker will show whether September was a peak or a new baseline.
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