India’s Russian crude imports set to fall in September amid tighter supply, Iraq a key alternative
India's imports of Russian crude oil fell to about 1.42 million barrels per day (mbpd) in the first 14 days of September 2026, roughly 30% lower than the August 2026 average of about 2.1 mbpd, according to commodity tracking data.
The decline follows tighter availability of Russian crude, attributed to disruption of Russian refining and export infrastructure and increased competition from Chinese buyers for the same barrels.
Iraq has emerged as a key alternative supplier, with imports from Iraq rising to about 535,000 barrels per day in the same period, more than triple the August average of about 163,000 bpd.
Imports from Saudi Arabia and the United States also rose during the period, indicating diversification of India's crude oil sourcing.
G7 Price Cap and Sanctions on Russian Oil
Following Russia's invasion of Ukraine, the G7 nations, the European Union, and Australia imposed a price cap mechanism in December 2022 that bars Western shipping, insurance, and financial services from being used for Russian seaborne crude sold above a set price (originally $60 per barrel). Separately, the United States has periodically imposed direct sanctions on major Russian oil companies, including sanctions on Rosneft and Lukoil, which together account for roughly half of Russia's crude oil exports.
Key Details
- G7/EU/Australia price cap on Russian seaborne crude: introduced December 2022, initially set at $60/barrel.
- The cap works by restricting insurance and shipping services (the "services ban" mechanism), not by directly blocking purchases.
- Additional direct US sanctions on Rosneft and Lukoil have tightened supply available to buyers like India, pushing some cargoes toward unsanctioned or "dark fleet" vessels.
- India has maintained that it does not recognise unilateral sanctions not backed by the UN Security Council, while its refiners independently adjust sourcing to manage compliance risk with Western financial systems.
The reported fall in Russian crude volumes and the shift toward alternative suppliers is a direct market response to this sanctions and price-cap architecture tightening supply and raising compliance risk for Indian refiners.
India's Crude Oil Import Diversification and Energy Security
India imports over 85% of its crude oil requirement, making diversification of supply sources a key energy security strategy. Since 2022, India significantly increased imports of discounted Russian crude, which briefly became India's largest single source of crude oil; the current pullback reflects renewed diversification toward traditional Gulf suppliers (Iraq, Saudi Arabia) and other sources (United States, Venezuela).
Key Details
- Iraq and Saudi Arabia have historically been among India's top two crude oil suppliers; Russia only became a top supplier after 2022 due to discounted pricing.
- India's strategic petroleum reserves (at Vishakhapatnam, Mangalore, and Padur) provide about 9-10 days of import cover as an additional buffer against supply shocks.
- Ship-to-ship transfers, used to route some Iraqi and other crude outside the Strait of Hormuz, are a logistics practice used to reduce transit risk through chokepoints.
The pivot to Iraq (and other suppliers) as Russian volumes fall illustrates India's practice of diversifying crude sourcing in response to changing price and availability conditions, a recurring theme in India's energy security policy.
Strait of Hormuz as a Strategic Chokepoint
The Strait of Hormuz, between Iran and Oman, is one of the world's most critical oil transit chokepoints, through which a large share of global seaborne crude oil and a significant share of global LNG trade passes. Alternative routing methods, such as ship-to-ship transfers outside the strait, are sometimes used to reduce dependence on this single passage.
The article notes Iraqi crude moving via ship-to-ship transfers outside the Strait of Hormuz, connecting the routine sourcing decision to broader chokepoint-risk management.
- India's Russian crude imports, first 14 days of September 2026: approximately 1.42 mbpd (about 30% below the August 2026 average of 2.1 mbpd).
- Iraq's supply to India, first 14 days of September 2026: approximately 535,000 bpd (up from an August average of about 163,000 bpd).
- Saudi Arabia's supply to India, first half of September 2026: approximately 430,000 bpd (up from 315,000 bpd in August).
- G7/EU/Australia price cap on Russian seaborne crude: introduced December 2022 at $60/barrel.
- India imports over 85% of its total crude oil requirement.