Whalesbook
India's overall crude oil imports declined in April 2026 as major private refiners Reliance Industries and Nayara Energy strategically reduced their purchases from Russia. This shift points to a potential recalibration of energy supply chains amid a volatile global market, impacting international trade and crude oil prices.
Russian Intake Slows Amid Price Surge
India's total crude oil imports dropped 3.7% month-on-month in April 2026. This decrease was largely driven by a 19.4% fall in Russian crude volumes purchased by Reliance Industries and Nayara Energy. Despite this reduction, India maintained its position as the second-largest buyer of Russian fossil fuels, with imports valued at around $5.82 billion for the month. Crude oil accounted for 90% of this total. Nayara's Vadinar refinery saw a nearly 92% drop in Russian crude imports, attributed to maintenance shutdowns. In contrast, state-owned Indian Oil's Vadinar refinery increased its Russian crude intake by 87%, and other refineries resumed imports after a pause.
The global oil market saw Brent crude surpass $119 per barrel in late April 2026, its highest level since 2022, due to geopolitical tensions and supply route disruptions. Russia's Urals crude also rose, averaging $112.3 per barrel in April, significantly above the EU and UK price cap. The discount for Urals crude narrowed against Brent amid higher demand and tight tanker availability.
Shifting Valuations and Sector Performance
India imported about 20.1 million tonnes of crude in April 2026, costing $16.3 billion. This volume was lower than the previous year, but the cost increased substantially due to surging prices. The average price for India's oil basket reached $114.48 per barrel in April 2026, a significant rise from $67.72 in April 2025.
Valuations for key players show varied market sentiment. Indian Oil Corporation (IOC) has a low P/E ratio (5.18-5.7x) as of May 2026, suggesting potential undervaluation. The Nifty Oil & Gas index has a P/E of 9.22, with an industry median of 16.17. Reliance Industries (RELIANCE) trades at a P/E of 18.69-26.72, above the industry median but below its 10-year median. Nayara Energy's P/E ratios range widely, from 18.38 to 83.1. Mangalore Refinery and Petrochemicals Ltd. (MRPL) has a P/E of 13.50-14.99, near its 10-year median.
Geopolitical Risks and Price Volatility
Geopolitical events, particularly tensions around the Strait of Hormuz, are heavily influencing the global oil market. The disruption of this key waterway has caused significant supply issues, driving Brent crude prices to multi-year highs and increasing volatility. The price cap on Russian oil has been widely breached, with Urals crude trading much higher. The US Energy Information Administration (EIA) raised its 2026 Brent spot price forecast to $96/bbl, citing the Strait of Hormuz closure. Persistent disruptions could push prices higher, potentially impacting global economic stability and inflation. India's reliance on Russian crude, while cost-effective, also exposes it to geopolitical risks.
Future Outlook
Global oil demand is forecast to contract in 2026 by 420 kb/d year-on-year, according to the International Energy Agency (IEA), due to the ongoing geopolitical crisis. Supply is also expected to decline, with Gulf countries' output impacted by the Strait of Hormuz closure. Higher production from the Atlantic Basin offers some relief, but supply projections assume a gradual resumption of flows through the Strait of Hormuz from June. High prices and supply uncertainties mean India's crude oil import strategy will remain crucial for its energy security and economic performance.