In September 2026, India increased crude oil imports from West Asia to 2.8 million barrels daily, reducing reliance on Russian oil. As the price discount for Russian crude narrowed to just $1–$2 per barrel, Indian refiners returned to shorter, more efficient supply routes from the Gulf to manage operational costs. This shift reflects a strategic recalibration in how the country sources energy to optimize its total landed cost.
In September 2026, India’s energy import strategy saw a clear pivot back to traditional suppliers in West Asia. Data reveals that crude imports from the Gulf region reached 2.8 million barrels per day, marking a significant recovery in volume. This change in procurement strategy was accompanied by a decline in the share of Russian oil in India's total import basket, which fell to 33.5% in September, down from 46.6% in the previous month.
The driving force behind this shift is the changing economics of oil trading. For the past two years, Russian crude was heavily discounted, with price cuts often exceeding $10 per barrel compared to global benchmarks like Brent. This massive discount made it financially viable for Indian refiners to tolerate longer shipping times and higher logistics costs associated with transporting oil from Russia. However, recent market trends show that these discounts have contracted significantly, with the premium on Russian oil now hovering between only $1 and $2 per barrel.
With the price advantage shrinking, the mathematics for Indian refiners has changed. Companies are now focusing heavily on total landed cost, which includes both the price of the oil and the cost of transport. West Asian producers, such as Iraq and the UAE, are geographically much closer to India, which means shorter voyage times and lower freight expenses. For refiners, reducing the time oil spends in transit is a direct way to manage profitability per barrel processed. Consequently, refiners have naturally gravitated back to these shorter supply routes to maintain efficiency.
Iraq, in particular, has seen a sharp uptick in its exports to India, with daily volumes reaching approximately 830,000 barrels in September, a significant jump from 171,000 barrels in August. This surge underscores how quickly the energy supply chain can adapt when the underlying price incentives change. While Russia continues to remain a top supplier by total volume, the trend demonstrates that India’s procurement strategy is highly flexible and tied to current market conditions rather than fixed long-term patterns.
For investors and market participants, the key monitorable remains the spread between Brent crude and Russian Urals. If the discount on Russian oil widens again, it could potentially lure refiners back to Russian supplies. Conversely, if the discount remains narrow, the preference for logistically efficient suppliers in the Gulf is likely to persist. Additionally, any major shifts in global oil logistics or freight rates will continue to influence how Indian refiners select their crude sources in the coming months.