Indian Refiners Turn To New Suppliers As Russian Oil Sanctions Bite

India’s refinery throughput dipped to its lowest level since February 2024, reflecting supply adjustments, softer domestic fuel demand, and uncertainty following fresh US sanctions on Russian oil majors. As refiners recalibrate sourcing strategies, the spotlight shifts to Middle Eastern, US, and Latin American suppliers.

Throughput Declines to 19-Month Low

According to provisional government data, India’s crude processing declined by 5.7% month-on-month in September to 5.14 million barrels per day (21.03 million metric tonnes). This was down from 5.27 million barrels per day (22.29 million metric tonnes) recorded in August.

 On a yearly basis, throughput fell 0.8%, highlighting a moderation in refining activity in response to fluctuating domestic demand and global supply disruptions.

Fuel Demand Weakens Marginally

India’s fuel consumption a key indicator of economic and industrial activity also softened. Oil ministry data showed a 0.5% month-on-month decline in fuel demand to 18.63 million metric tonnes in September, marking a one-year low.

Crude Imports Rise Despite Lower Refinery Runs

Interestingly, India’s crude oil imports climbed 1.7% month-on-month in September to 19.93 million metric tonnes, their highest level since June 2025. This rise suggests that refiners are building inventories ahead of expected demand recovery or diversifying supply in anticipation of global price shifts.

Geopolitical Shifts Impact Sourcing Strategy

With the US, UK, and EU imposing fresh sanctions on Russia’s oil sector including restrictions on Lukoil and Rosneft Indian refiners are facing sourcing challenges. The US Treasury has given global companies until November 21 to wind down transactions with these producers.

While some Indian refiners have paused new Russian oil orders pending government guidance, others have turned to the spot market, exploring cargoes from the Middle East, the US, and Latin America to maintain supply stability.

State-Run Refiners Remain Cautious but Steady

Despite the uncertainty, Indian Oil Corporation (IOC) has stated that it will continue purchasing Russian oil as long as transactions comply with existing sanctions.

Meanwhile, Bharat Petroleum Corporation Ltd (BPCL) has taken steps toward long-term capacity expansion, signing three new agreements, including a ₹1 trillion greenfield refinery and petrochemical complex in Andhra Pradesh in collaboration with Oil India.

Read More: Crude Oil Prices Edge Higher on Oct 29, 2025 Amid Middle East Tensions and Fed Rate Decision Eyed.

Conclusion

India’s September refining slump underscores the complex interplay of global geopolitics, domestic fuel demand, and evolving energy strategies. As refiners rebalance supply lines amid sanctions and shifting trade flows, their resilience and adaptability will be key to sustaining India’s position as a leading oil consumer and refining hub.

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