US sanctions on Russian oil: how India gained from restricted supplies

The US has imposed sanctions on two major Russian oil companies—Rosneft and Lukoil—citing Russia’s failure to seriously end the war in Ukraine. The goal of these sanctions is to put pressure on Russia’s energy sector, reduce its revenue, and limit its ability to fund the war and support its struggling economy. The sanctions were announced on October 22, 2025, and were set to come into effect by November 21, 2025. Analysts expect a noticeable drop in Russian oil exports to India and other buyers starting in December.

Russia’s oil story began in February 2022, when it invaded Ukraine. To fund its war efforts and support its economy under international pressure, Russia started selling crude oil at heavy discounts. Countries such as India and China benefited from this, buying cheap Russian oil. This helped them reduce their import costs significantly, even as the US sought to intervene with sanctions.

India’s oil imports illustrate this shift clearly. In January–August 2021, India imported Russian oil worth $1,240 million. This gradually increased in the following years: it rose to $34,664 million in 2024 and decreased slightly to $30,164 million in 2025. Russian oil’s share of India’s total oil imports also grew rapidly—from 2.2 per cent in January–August 2021 to 35.5 per cent in 2024, before falling to 31.9 per cent in 2025.

Meanwhile, India’s oil imports from the US fell sharply as Russian oil became cheaper and more available. US oil imports dropped from $6,774 million in January–August 2021 to just $3,228 million in 2024. In 2025, US oil imports in India recovered to $6,625 million, indicating some diversification in supply as geopolitical tensions and sanctions loomed.

Before the sanctions took effect, Indian refiners took advantage of the grace period to secure economical barrels of Russian crude. Ship tracking data from Kpler shows that in October and early November, Indian imports of Russian crude averaged 1.6 million barrels per day (Mbd) and 1.89 Mbd, respectively. This indicates a clear strategy to stock up before the sanctions cut off Russian oil supplies. Analysts expect these volumes to decline sharply in December and January once the sanctions are fully implemented.

The sanctions are part of a broader US effort to target Russia’s energy infrastructure and banking sector. By restricting the ability of Russian oil companies to sell globally, the US aims to weaken Russia’s economic strength and its ability to sustain the war in Ukraine. While these measures are likely to affect global oil prices, India’s large reserves and strategic purchases have cushioned the immediate impact on its economy.

India benefits from discounted Russian oil

The story of Russian oil in India highlights how global geopolitical shifts can benefit some countries. When Russian oil became available at discounted rates, India was able to reduce its oil import costs significantly. This helped balance the trade deficit and supported India’s energy needs at lower prices.

Despite the US sanctions, India continued importing large volumes of Russian oil until November 21, taking full advantage of the period before restrictions came into force. This strategic buying allowed Indian refiners to secure crude at lower prices, ensuring that domestic fuel supplies remained stable and affordable. Many analysts suggest that India’s approach reflects careful planning and opportunistic decision-making in the face of shifting global energy markets.

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The effect on US oil imports in India has also been notable. As cheaper Russian oil flooded the market, Indian importers reduced purchases from the US, dropping from $6,774 million in early 2021 to just $3,228 million in 2024. This shows how price competitiveness and timing can influence import patterns even for major economies. With US oil imports rebounding to $6,625 million in 2025, it is clear that India is diversifying its sources while continuing to benefit from strategic Russian purchases.

The sanctions may reduce Russian oil exports in the coming months, but India’s proactive buying before the cut-off allowed it to gain temporary advantage. Analysts expect that imports from Russia will decline sharply in December and January, but by that time, India would have already secured significant volumes at lower prices. This strategy highlights India’s ability to adapt to global sanctions and take advantage of market opportunities.

The larger lesson from this episode is the importance of timing and market strategy in global energy trade. By carefully tracking global sanctions, pricing trends, and shipping data, India was able to maintain its energy security while benefiting economically. Even as Russia faces restrictions from the US, countries like India and China can gain temporary advantages from discounted oil, stabilising domestic energy needs and reducing import costs.

In conclusion, US sanctions on Russian oil were designed to pressure Russia’s economy and limit its war funding. However, India was able to use the pre-sanction period to import Russian oil at discounted rates, benefiting its energy security and economy. Russian oil’s share of Indian imports rose significantly over the past few years, while US oil imports fell and then partially recovered in 2025. The sanctions, effective from November 21, are expected to reduce Russian shipments, but India’s proactive purchases ensured that it maximised benefits before the restrictions took effect. This episode highlights how global geopolitics, sanctions, and market strategies interact in shaping energy trade patterns.