In the face of mounting global pressure, particularly from the United States, India’s largest petroleum company — Indian Oil Corporation (IOC) — has reiterated that its decision to continue buying crude oil from Russia is purely based on business considerations and not geopolitics. Despite repeated criticism from Washington, IOC confirmed that Russian oil remains a crucial part of its crude sourcing strategy and will continue to play a key role in the company’s long-term energy plans.
Russian Oil Accounts for Nearly a Quarter of Indian Oil’s Imports
According to company data, Russian crude contributed 22% of Indian Oil’s imports during the fiscal year 2024-25. This share has in fact risen to 24% in FY26, including the current quarter.
Executives from Indian Oil clarified that the company has not received any official instructions from the government either to cut down or increase purchases of Russian oil. The sourcing strategy, they emphasized, is based on commercial advantages, particularly the discounts offered on Russian crude.
“Neither are we being told to buy, nor told not to buy,” a senior IOC official said. “This is a business decision. We are not making extra efforts to either increase or reduce Russian crude’s share in our basket.”
Currently, Indian Oil is buying Russian crude at a discount of about $1.5 per barrel to the Dubai benchmark, a margin that adds significant value given the company’s refining scale and margins.
Indian Oil : U.S. Pressure and Geopolitical Backdrop
The United States has been vocal about its disapproval of India’s continued oil trade with Russia, alleging that it indirectly funds Moscow’s ongoing war in Ukraine. Washington has repeatedly expressed concerns that discounted Russian crude, refined in India, may be re-exported to Western markets as petroleum products, thus undermining the sanctions regime.
Former U.S. President Donald Trump has, on several occasions, accused India of financially aiding Russia through these energy purchases. Recently, White House trade adviser Peter Navarro, writing in the Financial Times, described India as acting like a “global clearinghouse for Russian oil.” According to him, India is effectively converting embargoed crude into high-value exports while enabling Moscow to secure vital foreign exchange.
Navarro warned that if India wanted to be treated as a true strategic partner by the United States, it needed to “start acting like one” and align more closely with Western sanctions policies.
India’s Counterpoint: Unfair Targeting
India has consistently defended its position, arguing that it is being unfairly singled out for purchasing Russian oil. Officials from the Ministry of External Affairs have pointed out that Western countries, including members of the European Union, continue to import essential goods, fertilizers, and other commodities from Russia despite the sanctions.
New Delhi maintains that its energy security is paramount. With India being the world’s third-largest consumer of crude oil, importing over 85% of its requirements, the government has argued that affordable energy supplies are non-negotiable for sustaining growth in Asia’s fastest-growing major economy.
Industry experts highlight that by sourcing discounted crude from Russia, India not only ensures cost stability for its refiners but also helps keep domestic fuel prices under control. This, in turn, supports broader economic stability.
Indian Oil’s Expansion Plans: ₹34,000 Crore Capex in FY26
While defending its sourcing strategy, IOC is also focusing on major capital expenditure (capex) projects worth ₹34,000 crore in FY26. These investments underline the company’s commitment to expanding capacity, improving efficiency, and ensuring India’s long-term energy security.
The company’s two flagship projects under this plan are:
- Panipat Refinery (Haryana) Expansion – One of IOC’s largest refineries, the Panipat unit is undergoing expansion to meet rising domestic fuel demand.
- Vadodara Refinery (Gujarat) Modernization – Upgrades are being made to enhance efficiency, integrate green technologies, and align operations with future energy transition goals.
Additionally, Indian Oil is working on capacity enhancements at its Paradip Refinery in Odisha, which is strategically important for both domestic distribution and exports.
Indian Oil: Business, Not Politics
Indian Oil’s leadership has been clear that the decision to import Russian oil is strictly commercial. The discounts, logistical availability, and supply stability make Russian crude an attractive option in a highly competitive global energy market.
Analysts believe that India’s stance reflects a broader reality: energy security often outweighs geopolitical pressures. With global oil prices volatile and OPEC+ production cuts tightening supply, access to discounted Russian barrels has given India an edge in stabilizing costs.
Furthermore, Indian refiners — including IOC — have the capability to process a wide variety of crude grades, making Russian oil a suitable fit for their systems.
Indian Oil: Market Implications
Despite the geopolitical noise, IOC’s strategy is expected to strengthen its refining margins and maintain steady fuel supply in India. Investors, however, are keeping a close watch on potential secondary sanctions from the U.S. or its allies, which could affect global oil trade flows.
For now, experts suggest that India is likely to continue balancing its diplomatic relations with Washington while safeguarding its energy needs. The business-first approach of IOC illustrates how commercial realities often shape global trade decisions more than political rhetoric.
Indian Oil’s decision to continue importing Russian crude, even under the glare of U.S. criticism, highlights the delicate balance between business pragmatism and geopolitical diplomacy. With nearly a quarter of its crude coming from Russia, IOC argues that discounted oil is vital for maintaining economic stability and fueling growth in India’s energy-hungry market.
At the same time, the company is investing heavily — with ₹34,000 crore earmarked for refinery expansions in Panipat, Vadodara, and Paradip — signaling its long-term commitment to strengthening India’s refining capacity.