Oil
Indian refiners shift from Russia to Persian Gulf crude
Rising freight costs are pushing Indian refiners away from Russian oil and back toward discounted Persian Gulf supplies.
Key points
- Indian processors reduce Russian crude purchases due to high freight expenses.
- Persian Gulf producers offer significant discounts to attract buyers.
- State-owned refiners take greater control of logistics by chartering their own tankers.
What happened
Indian oil refiners are altering their purchasing strategies by reducing imports from Russia and increasing acquisitions from the Persian Gulf, according to Rigzone reporting. Traders indicated that surging freight costs have severely undermined the economic viability of long-haul shipments from Moscow. While Russian crude has been offered at a premium to standard benchmarks, suppliers in the Middle East are providing substantial price reductions.
Bharat Petroleum Corp. Chief Financial Officer Vetsa Ramakrishna Gupta noted during an earnings call that Russian cargo volumes have dropped because of unfavourable commercial terms. Hindustan Petroleum Corp. Chairman Vikas Kaushal similarly explained that producers in the Gulf are offering deep discounts to offset high freight expenses. Major processors including Indian Oil Corp. and Mangalore Refinery and Petrochemicals Ltd. have also scaled back their intake of Russian oil.
Changing trade dynamics
This shift marks a notable reversal in global trade flows that developed after the conflict in Ukraine began, when India became a primary destination for discounted Russian barrels. Producers such as Saudi Arabia and the United Arab Emirates are successfully reclaiming market share by offering prompt-loading cargoes at competitive rates. Furthermore, Indian refiners are increasingly managing their own shipping logistics by chartering independent tankers to lift Iraqi crude directly, contrasting with the delivered-basis shipments typical of Russian trade.
Why it matters
Global crude benchmarks remain elevated, with Brent spot prices recorded at 115.22 US dollars per barrel and WTI at 107.89 US dollars per barrel on 20-10-2026, according to US EIA data. For energy investors and African producers, this redirection of trade highlights how logistical bottlenecks and escalating transport expenses can rapidly alter established international supply chains. As Asian refiners optimize their feedstock costs based on delivered economics rather than base prices alone, producing nations worldwide must adapt their pricing and transportation strategies to remain competitive in a volatile global market.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
13.1% of India’s merchandise exports were fuels in 2025Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
