India Russian Crude Oil Timeline 2021–2026: From Discounts to Refining Margins

In January 2026, India’s imports of Russian crude oil sank to roughly 1.1 million barrels a day — the lowest since late 2022. Six months later, in July 2026, they hit a record 2.82 million barrels a day, with Russia supplying more than 55% of every barrel India imported that month. Nothing about Russian crude changed in between. What changed was the Strait of Hormuz, a scramble for alternative supply, a narrowing discount, and a refining calculation Indian companies re-run every single week. This is the story of how Russian crude became India’s most important barrel — and why the reason has never stayed the same for long.

Through January 2022, Russia supplied less than 0.2% of India’s crude oil imports. India’s refiners built their entire operating model around a short, predictable Gulf run: Iraq, Saudi Arabia, the UAE and Kuwait together supplied roughly 85% of India’s crude, arriving in days across the Arabian Sea rather than weeks from the Baltic or Black Sea. Russian grades barely featured in the specifications Indian refineries were configured around. The question “why would India buy oil from much farther away?” simply didn’t arise, because the delivered economics never worked in Russia’s favor — until sanctions rewrote the price of every alternative.

This is why the cheapest barrel at the port is not always the most profitable barrel after refining. A steep discount on paper can be partly or fully absorbed by extra freight, an insurance premium for a non-Western-flagged tanker, financing costs during a sanctions-scrutiny period, or a lower yield of the specific products that barrel’s grade makes well.

When Chinese demand rises, as it did in July–August 2026, competition for the same Russian cargoes intensifies and India’s volumes and discount both come under pressure. When Chinese demand eases, Indian buyers typically find it easier to secure barrels and better terms. Neither country buys Russian crude in a vacuum.

Most of the crude that fills India’s traditional Gulf-supplier basket — Iraq, Saudi Arabia, the UAE, Kuwait — has to pass through the Strait of Hormuz to reach the Arabian Sea and India’s west-coast refineries. When Iran closed the strait to normal commercial traffic on February 28, 2026, following US and Israeli strikes that reportedly killed Iran’s Supreme Leader, that route did not just get more expensive — for months, it was barely usable. World Trade Organization figures cited in reporting on the crisis pointed to a roughly 95% drop in crude tanker traffic through Gulf ports during the closure.

That is the real mechanism behind 2026’s Russian-import surge: alternative supply became risky before it became scarce, and Russian barrels became valuable because the alternative wasn’t reliable, not because Russian oil itself got any cheaper. A US aerial campaign (from March 19) and a naval blockade on Iran (from April 13) followed, and while a ceasefire framework later reopened the strait on a guaranteed-safe-passage basis, that reopening proved temporary, and the corridor reverted to effective closure. As of this article’s September 2026 update, the situation remains unstable. For the full sequence of the conflict itself, see AiTimeline’s Strait of Hormuz timeline.

Exact FY2024-25 percentage shares for Iraq, Saudi Arabia, the UAE and the US individually were not independently re-confirmed in this research pass; this article shows Russia’s confirmed share precisely and describes the others’ positions directionally rather than inventing precise numbers for them. Energy security here is best read as optionality — India has consistently kept multiple suppliers live rather than replacing one geopolitical camp with another.

India imports roughly 88% of the crude oil it processes (PPAC, FY2025-26), up from 85.5% in FY2021-22. Because most of that import bill is paid in US dollars, a rise in the price of crude — Russian or otherwise — translates fairly directly into a larger dollar outflow, pressure on the rupee, and eventually consumer inflation. As of mid-September 2026, this is not theoretical: India’s own crude oil basket price hit roughly $128.70/barrel (the highest since April 2026) as Brent crossed back above $100, the rupee fell past ₹94.8/dollar — its sharpest one-day drop since late July — and August’s consumer price inflation rose to 4.82% year-on-year from July’s 4.45%, with analysts at ICRA expecting inflation to cross 5% in September. Motilal Oswal has estimated India’s current account deficit could widen to around 1.7% of GDP if crude stays above $90/barrel through the second half of FY2026-27.

India’s Strategic Petroleum Reserve currently holds about 5.33 million tonnes of crude — roughly 9.5 days of import cover — across underground caverns at Visakhapatnam, Mangaluru and Padur. A Phase II expansion, adding roughly 6.5 million tonnes of capacity at Chandikhol (Odisha) and a second Padur facility, would eventually take total capacity to about 11.83 million tonnes. In May 2026, India’s Strategic Petroleum Reserves Limited (ISPRL) signed a strategic collaboration agreement with UAE’s ADNOC, part of a broader push to pair supplier diversification with physical reserve capacity as a hedge against exactly the kind of Gulf disruption 2026 produced.

A voyage carrying Urals or ESPO crude from Russia’s Baltic, Black Sea or Pacific ports to an Indian refinery is meaningfully longer than a Gulf-to-India run, which adds real freight cost regardless of the crude’s discount. Some of that trade moves on what shipping analysts describe as a “shadow fleet”: older tankers, often with opaque or shell-company ownership, insured outside major Western P&I clubs, and sometimes changing flags or conducting ship-to-ship transfers to obscure a cargo’s origin. That description applies to a meaningful but not universal share of Russia-linked shipping — not every vessel carrying Russian crude to India is part of it, and this article does not claim otherwise.