Energy has always been one of the key levers in matters of geopolitics. Since the first day of the full-scale Russian invasion of Ukraine, unprecedented sanctions have been imposed on Russia, forcing Moscow to redirect energy supplies from Europe to Asia in search of buyers.
The key to this shift was India as a large and flexible buyer capable of accepting large volumes of oil, especially since it bought from Russia at a significant discount of up to $30 per barrel. In this situation, it turned out that the decision of Indian buyers depends not only on market logistics, but also on the political effectiveness of sanctions against the Kremlin.
After 2022, the West tightened conditions for working with Russian oil companies. Price limits, insurance and service restrictions, bans for individual companies were introduced. At the same time, this opened a window of opportunity for buyers willing to work with Russia on new terms. For example, India rapidly increased its oil purchases, reaching 2 million barrels per day in individual months of 2024, making India the largest buyer.
For Moscow, this meant retaining significant export earnings and significantly reducing the severity of the sanctions impact, as Russia’s economy is based on energy trade, with oil as the leading commodity.
The strategy of economic sanctions is not only the imposition of prohibitions, but also the closing of sales channels, but when one major buyer is ready to replace many others, sanctions lose part of their impact. In the case of Russia, this manifests itself in three key mechanisms.
Oil sales are the main source of Russian foreign exchange earnings. Even if Russian barrels are sold at a significant discount, the aggregate proceeds remain important for domestic budget and foreign-policy financing.
Logistics schemes (trans-shipment in third ports, renaming of ships) and work outside the main insurance markets allow to circumvent some restrictions. As long as the buyer is willing to turn a blind eye to additional transaction risks, exports remain viable.
Massive demand from India, countries with growing populations and economies gives Russia the argument: «sanctions do not work – we have alternative markets». This weakens the international political coalition and reduces pressure on third countries.
In the autumn of 2025, there were signals that the dynamics are changing. Major Indian players and state oil refineries have begun reviewing contracts and logistics following new sanctions against large Russian companies. To avoid falling under Western constraints, Indian processors have started tightening the requirements, and private giants are announcing «recalibration» purchases according to government instructions.
These measures had an immediate impact on the markets. The rise in oil prices and reports of declining supplies have already reflected a real, not just a rhetorical, trade adjustment.
Today’s realities point to increased pressure from the US and Europe on Indian buyers. It is no longer just «diplomatic pleas» but direct trade signals and sanctions threats that change the commercial calculation of Indian companies.
Why would India, with its growing industrial base and yet to establish its energy independence, accept the risk of making such profitable purchases?
First and foremost. Energy security and low-cost fuels are an essential element of the political capital of the Indian leadership. For Narendra Modi’s government, fuel price stability is not only an economic issue, but also a socio-political one, because rising gasoline and diesel prices in India have traditionally caused widespread discontent, especially among the middle class and rural populations.
After the conflict in Ukraine, when world oil prices soared, New Delhi managed to keep domestic prices relatively stable by increasing Russian oil purchases at record discounts – to $25-30 per barrel relative to Brent.
This strategy allowed Indian refiners such as the Indian Oil Corporation (IOC), Bharat Petroleum, and the private giant Reliance Industries to process cheap commodities and sell products domestically without a spike in distribution prices. In 2023, according to the Indian Ministry of Oil, more than 35% of imported oil came from Russia, which helped contain fuel inflation at around 5%, while gasoline prices in other Asian countries grew almost twice as fast.
In addition, low-cost imports have provided a resource for the payment of fuel subsidies, which amounted to about 250 billion in 2022-2024. Rupee (more than $3 billion). These funds went to compensate agricultural producers and transport companies, alleviating social pressures. For the Modi government, this became a tool to strengthen electoral support before the 2024 elections.
Cheap gasoline and diesel were seen as a symbol of economic sustainability and self-sufficiency in India.
Thus, dependence on Russian supplies has become part of the domestic social contract, allowing the authorities to demonstrate that it protects citizens from global crises. But it is this dependency that makes the country vulnerable, because any tightening of the sanctions regime, disruptions in delivery or increased political pressure from outside can instantly hit domestic prices and cause waves of discontent, This explains the caution of the Indian leadership in discussing possible procurement cuts.
Second, major private players, such as the leading petrochemical and refinery concerns, have received excess profits on Russian barrelels. According to information published in The Washington Post at the end of September this year, since the full-scale invasion of Ukraine, the private company Reliance has bought oil from Russia for about $33 billion. The amount represents approximately 8% of total crude oil sales in Moscow during this period.
Reliance’s purchase of oil from Russia at reduced prices was a boon to its owner – billionaire Mukesh Ambani, and a lifeline for Moscow in an era of growing international isolation. Such financial interests also create a powerful lobbying resource.
Nevertheless, the Indian state has accepted external pressure. The loss of trade flows and the risk of secondary sanctions make the economy vulnerable. It is the combination of domestic policy, commercial pressure and external coercion that can become the trigger that will lead to a sustained reduction in procurement.
It is important to understand that reducing India’s demand for Russian oil will not automatically solve the problem of sanctions. This is a necessary step to close the easiest routes of circumvention, but it must go hand in hand with international measures: tighter fleet control and insurance, coordination at ports, and work with financial channels.
Only a comprehensive approach makes the effect cumulative, then Moscow’s revenues fall significantly and more steadily.
India is now becoming a key test for global sanctions policies. Its decision on whether to continue buying Russian oil or gradually reduce dependence will determine not only the balance of Moscow’s revenues, but also the effectiveness of an international coalition seeking to limit the Kremlin’s military ambitions. India’s reduction in procurement is a political decision with far-reaching consequences.
However, for those who shape sanctions policy, the task is simple in formulation and difficult to execute. India must be convinced that the long-term benefits of diversification and international reputation prevail over short-term economic advantages. Indian policymakers need to find a balance between domestic stability and external commitments. Without this balance, sanctions will remain half-hearted, powerful in intent, but limited in results.