India’s imports of Russian crude have fallen significantly in August as Chinese demand rises, competing for available barrels. With Brent crude prices climbing above $90 a barrel and discounts narrowing, Indian refiners are facing a tighter supply chain and rising procurement costs.
Indian oil refiners are currently navigating a tighter supply environment in August 2026. The country’s intake of Russian crude oil has declined to approximately 1.9 million barrels per day (mbpd), a noticeable drop from the record levels of 2.8 mbpd seen in July. This change is being driven by a combination of global market shifts and domestic operational factors.
One of the primary reasons for this decline is increased competition from China. As Chinese refiners adjust their sourcing strategies to offset disruptions in other regions, they have significantly ramped up their purchasing of Russian crude. This increase in Chinese buying has diverted supply that might otherwise have flowed to Indian ports, making it more challenging for domestic refiners to secure the same volume of discounted barrels.
Beyond external competition, domestic operations are also playing a role. Several major Indian refineries, including units at Mangalore Refinery and Petrochemicals Limited (MRPL) and the Panipat refinery, are currently undergoing planned maintenance. These scheduled shutdowns naturally reduce the amount of crude oil that refineries need to process in the short term. However, the timing of these maintenance cycles, combined with the tightened global supply, has created a complex situation for procurement teams.
For investors, the financial implications are centered on the rising cost of acquisition. Global oil benchmarks have shifted, with Brent crude futures trading above $90 per barrel. Simultaneously, the deep discounts that Indian refiners previously enjoyed on Russian and Venezuelan crude are beginning to narrow or vanish. The average cost of the Indian Basket—a weighted average of the price of crude oil that India imports—rose to $88.62 per barrel in August, up from $82.04 in July. This increase directly impacts the import bill and can create pressure on the country's Current Account Deficit.
Looking ahead, several risks remain for the sector. There is lingering uncertainty regarding potential US regulatory actions and proposed tariffs on major buyers of Russian energy, which could create compliance and logistical hurdles. Additionally, the ongoing instability in the Middle East continues to pose a threat to broader supply chain security.
The next important monitorables for investors will be the speed at which refineries complete their maintenance and return to full capacity, and whether global oil prices remain at elevated levels. Additionally, keeping an eye on official government data regarding the monthly oil import bill will provide a clearer picture of how these changing procurement costs are affecting the bottom line for the refining sector.