India Pivots to Middle Eastern Oil as Russian Imports Hit Multi-Year Lows

2026-02-19 global

New Delhi, Wednesday, 18 February 2026.
India’s Russian crude imports plummeted to 2022 lows in January, allowing Middle Eastern suppliers to reclaim a dominant 55 percent market share following a strategic trade agreement with Washington.

A Drastic Shift in Supply

The reconfiguration of India’s energy landscape accelerated sharply in January 2026, with Russian crude shipments falling to approximately 1.1 million barrels per day (bpd), their lowest volume since November 2022 [1]. This contraction represents a significant market correction, with Russian supplies decreasing by 23.5% from December 2025 levels [1][3]. Consequently, Russia’s share of the Indian market shrank to 21.2%, a figure not seen since October 2022 [1][3]. As refiners moved away from Moscow’s discounted barrels, traditional partners stepped in to fill the void; Middle Eastern grades surged to capture roughly 55% of India’s overall imports, while Latin American supplies climbed to a 12-month high of about 10% [1][3]. The financial implications of this pivot are equally stark, with India’s total merchandise imports from Russia plunging by 40.48% year-on-year to $2.86 billion in January 2026 [2][5].

The Geopolitical Catalyst

This abrupt alteration in trade flows is inextricably linked to high-stakes diplomatic maneuvering between New Delhi and Washington. On February 6, 2026, the Trump administration removed a punitive 25% tariff on Indian goods—originally imposed in August 2025—after India committed to halting the direct or indirect import of Russian oil [2][5]. This diplomatic breakthrough was formalized in a trade agreement announced earlier in the month, which reduced overall tariff rates to 18% and secured an Indian commitment to purchase $500 billion worth of U.S. energy products, aircraft, and technology over the next five years [2][7]. Commerce Minister Piyush Goyal emphasized that this deal serves as a strategic tool to diversify India’s crude sources, noting that the country had previously become dependent on limited geographies for critical resources like coking coal [7].

Returning to Traditional Partners

As the geopolitical dust settles, the operational reality for Indian refiners is a rapid return to established OPEC suppliers. Saudi Arabia is reclaiming its status as India’s top supplier, with February 2026 imports projected to reach 1.03 million bpd, a notable increase from the 774,000 bpd recorded in January [1][8]. This upward trajectory is expected to continue, driven partly by Saudi Arabia cutting the March 2026 Official Selling Price (OSP) for its benchmark Arab Light grade to parity with the Oman/Dubai average—the lowest pricing basis since December 2020 [8]. Conversely, the outlook for Russian flows remains bearish; industry analysts at Kpler project that arrivals from Russia could plummet to as low as 593,000 bpd in March 2026, marking a precipitous drop of roughly 58.531 percent from the 1.43 million bpd estimated for February [8].

Strategic Implications and Future Outlook

The pivot away from Russian crude occurs against a backdrop of intensifying energy security needs, with India’s oil demand forecast to grow from 5.5 million bpd in 2024 to 8 million bpd by 2035 [4]. While New Delhi aims for energy self-reliance by 2047, the immediate priority remains securing reliable supply lines to support a growing economy [4]. As India recalibrates, global trade patterns are shifting; China has now overtaken India as Russia’s largest seaborne crude buyer, importing record volumes in early 2026 [3][8]. Meanwhile, Indian refiners are reportedly exploring the commercial viability of alternative sources, including Venezuelan crude, to mitigate the loss of Russian barrels [4][5]. With the new U.S. trade pact in force, the structural decline of Russian oil in India’s import basket appears likely to persist in the medium term [1].

Sources

Geopolitics Energy Markets