India Seeks Russian Oil Amid West Asia Supply Disruptions
India's import of Russian crude oil has seen a significant increase since the start of the US-Iran war, driven by supply disruptions in West Asia rather than discounts. According to an Axis Bank Economic Research report, India imported an average of 60 million barrels per month of Russian crude between March 2026 and August 2026, compared to 46 million barrels per month during FY23-26.
The report found that Russia's share in India's imported crude basket jumped from 0% to 30% between March 2022 and June 2023 due to discounts. However, the additional 1 million barrel per day since March 2026 cannot be explained by price dynamics alone.
The average discount on Russian crude vs West Asia has been stable at $3-5/bbl since 2023, and Russia's share of Indian crude imports rose despite premiums of up to $7/bbl. If India were to procure these excess barrels in the spot market, oil prices would likely be higher than today.
The report also noted that the threat of very high tariffs is more useful as leverage in trade negotiations than tariffs themselves, and higher oil prices have a direct passthrough on US retail inflation. Republicans are already on the back foot in the midterms due to elevated energy prices.