India's oil market: Why state-owned refineries are cutting Russian crude while private firms step up?

India’s oil market is seeing a mixed approach as state-owned and private refiners take contrasting strategies on Russian crude.

State-run companies have cut back sharply while private refiners continue to take in supplies.

In September, they imported an average of 605,000 barrels per day (bpd), 32% below their April–August average, 22% lower than August, and 45% below June levels, according to Kpler, a global real-time data provider.


Private refiners, however, have increased their purchases. Their imports rose to 979,000 bpd, 4% above their April–August average, 8% higher than August, and almost unchanged from June.

This means that Russian crude accounted for just one in five barrels bought by these firms while two in three barrels imported by private firms came from Russia.

Executives said that the differences reflect priorities. State refiners, which serve the bulk of the domestic market, are cautious amid US pressure to curb Russian oil, narrowing discounts, and the need to diversify supply.

Industry executives told ET that state firms priortise security over price due to their larger responsibility toward the domestic market. Private companies, which control around 10% of retail sales, focus on profit, shifting between domestic and export markets.

Reliance Industries benefits from a long-term deal with Rosneft, which offers deeper discounts and a minimum monthly purchase commitment. Nayara Energy, also linked to Rosneft, remains heavily dependent on Russian crude.

“There has definitely been a stronger push for diversification of supply, but Russian oil remains central,” said Sumit Ritolia, lead research analyst at Kpler.

“Russian barrels remain among the most economical feedstock options for Indian refiners given their high gross product worth margins and discounts relative to alternatives,” Ritolia further told ET.

The overall effect came out to be Russian oil imports falling 6% from August and 13% below the April–August average, down to 1.58 million bpd.