For decades, India’s energy story was predictable. We looked almost exclusively toward the Middle East to power our growing economy. But the last few years have been anything but predictable. From the post-pandemic recovery to the geopolitical shockwaves of the Russia-Ukraine war, India’s oil import map has been redrawn multiple times.
According to a recent deep-dive by the Economics Research Department, we are witnessing yet another pivot. While Russia remains a dominant player, the “honeymoon period” of massive price discounts is fading, and traditional allies—along with the United States—are reclaiming their territory.
The Big Picture: A Quarter of the Bill
To understand why this matters, we have to look at the scale. Oil isn’t just a commodity for India; it is a macroeconomic pillar. Currently, oil imports account for roughly 23.5% of India’s total import bill.
In the current fiscal year (FYTD26, covering April to November 2025), India’s overall imports rose by 5.6%, reaching a value of US$ 515.2 billion. Interestingly, while the total bill grew, the specific cost of oil imports actually fell by 5.3% year-on-year. This wasn’t because we stopped needing oil—India’s consumption remains robust at an estimated 5.9 million barrels per day —but rather because international Brent prices softened significantly compared to the previous year.
The Russian “Pivot” is Easing
The most dramatic shift in the last decade has been the rise of Russia. Ten years ago, Russia was a footnote in our energy ledger, accounting for a mere 0.2% of imports. Following the outbreak of the Russia-Ukraine war in early 2022, Russia displaced earlier suppliers like Brazil and Nigeria to become our top source.
By November 2024, Russia’s share had skyrocketed to 30.2%. However, the most recent data shows a cooling trend. As of November 2025, that share has moderated to 27.6%.
Why the decline? It boils down to two human factors:
- The Price Gap is Closing: The “cost advantage” of Russian crude is narrowing. In FYTD23, Russian oil was roughly US$ 12–15/bbl cheaper than oil from the UAE or US. Today, that gap has shrunk to around US$ 5–7/bbl.
- Logistics and Risk: New US sanctions on Russian shipments have reportedly pushed up freight costs, eating further into the remaining discounts.
The Resilience of Traditional Suppliers
Despite the headlines about Russia, India’s “Old Guard”—Iraq, Qatar, UAE, Saudi Arabia, and Kuwait—remain the bedrock of our energy security. Collectively, these Middle Eastern nations provided 54.3% of our oil in 2015. Even today, after all the global upheaval, they still command a massive 48.8% share.
Specifically, the UAE has seen its share inch up to 13.3% (from 12.5% last year). These countries offer stability and established credit terms that are hard to ignore, even when “discounted” oil is available elsewhere.
The Quiet Rise of US Oil
Perhaps the most interesting “sleeper” in this report is the United States. After gaining share post-Covid, the US briefly lost ground to Russia due to price disadvantages. But the tide is turning again.
In the current fiscal year, US oil imports have registered a sustained increase, even as imports from Russia and Iraq have declined. The US share of India’s oil imports has climbed from 5.8% to 8.2% year-on-year.
Interestingly, this shift began before the US imposed additional 25% tariffs on India in August 2025. It suggests that Indian refiners are making purely commercial decisions based on the narrowing price difference between American WTI/Brent and Russian grades.
The “Price Theory” Explained
If you look at the average cost per barrel, the logic becomes clear. In the period between September and November 2025, the gap between US and Russian oil prices fell to just US$ 5/bbl, compared to over US$ 9/bbl the previous year. When the price difference is that small, the added risks of sanctions and rising freight costs make the US or Middle Eastern options much more attractive for Indian buyers.
Final Thoughts
India’s energy strategy is becoming increasingly sophisticated. We are no longer dependent on a single region, nor are we blindly chasing discounts. Instead, India is playing a balancing act—leveraging Russian oil when the price is right, but quickly pivoting back to the US and Middle East as market dynamics shift.
As we move further into 2026, the key indicators to watch will be the stability of Brent prices and the impact of global trade tariffs. One thing is certain: India’s oil story is no longer just about buying fuel; it’s a masterclass in navigating global geopolitics.
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