India’s crude oil trade with Russia is once again testing the limits of geopolitics, sanctions compliance, and commercial pragmatism. Despite expectations that US sanctions would sharply curtail purchases, India’s Russian oil imports are now poised to exceed one million barrels per day in December, underscoring the resilience of the trade channel and the economic incentives driving refiners’ decisions.

India emerged as Russia’s largest seaborne crude buyer after Western nations imposed sweeping sanctions following Moscow’s invasion of Ukraine. For Indian refiners, Russian barrels offered a rare combination of supply security and steep discounts at a time of volatile global energy markets. However, this trade has increasingly drawn scrutiny from Washington, particularly after sanctions were imposed on two major Russian producers and as trade frictions between India and the US intensified.

November imports already surprised on the upside, reaching about 1.77 million barrels per day, up 3.4 percent month-on-month, according to trade data. This momentum was expected to reverse as refiners reassessed counterparty risks and compliance costs. Instead, December volumes are tracking well above initial expectations.

Preliminary trade flow data indicates December arrivals could exceed 1.2 million barrels per day and may average as high as 1.5 million barrels per day by month-end. A key driver has been a rush to finalise transactions ahead of Washington’s November 21 deadline for completing deals with sanctioned Russian entities such as Rosneft and Lukoil. Multiple cargoes tied to these pre-deadline contracts have already landed at Indian ports.

Looking ahead, trade sources suggest imports could remain elevated into January as non-sanctioned intermediaries step in to maintain supply. Russian producers are increasingly relying on domestic market swaps, diverting sanctioned barrels to local refineries while export volumes are routed through non-sanctioned firms. This mechanism allows Russia to preserve export flows without directly breaching sanctions, while Indian buyers retain access to discounted crude.

For India, the economics are compelling. January-loading Russian crude is reportedly trading at discounts of around $6 per barrel to dated Brent, two to three times wider than discounts seen in August. For a country that imports the bulk of its crude needs, such pricing materially lowers the import bill and cushions inflationary pressures.

At the same time, the trade carries diplomatic and commercial costs. Russian oil purchases have become a sensitive issue in India–US trade negotiations, particularly after US President Donald Trump doubled tariffs on Indian goods to 50 percent. A US official has publicly argued that sanctions and tariff pressure are limiting Russia’s revenues and straining its war finances, signalling that enforcement scrutiny is unlikely to ease.