India’s imports of Russian crude reached a record level in June. (Photo from PTI archive of Russian oil tanker)
Russia is one of the few countries in the world that has the distinction of being one of the largest exporters of crude oil and also among the largest refiners. But four years after Moscow’s war with Ukraine began, reports have emerged indicating that India is now supplying gasoline to Russia.According to a Reuters report, traders sold gasoline produced by Nayara Energy. Incidentally, Nayara is a Russian-backed refinery in India. The refinery has only processed Russian crude since EU sanctions imposed in July 2025, and relies on international traders for both crude imports and refined product exports. Last week, Reuters reported that about 60,000 metric tons of gasoline were sent from India to Russia.However, Oil Minister Hardeep Singh Puri said that Indian companies do not sell petrol directly to Russia. The minister said: “Due to the damage to its refineries due to the war, Russia may have started purchasing gasoline from India. As far as I know, it is not purchased from any of our companies. Rather, it is purchasing products of Indian origin from a merchant.”According to Sourav Mitra, Partner, Oil & Gas, Grant Thornton Bharat, industry reviews of the tanker’s bill showed that the vessel Agni Loading gasoline at Vadinar, Fujairah on June 20; However, LSEG ship tracking data later showed it passing through Fujairah and crossing the Suez Canal northwards, illustrating the murky nature of the trade route.
Why does Russia import gasoline?
The Ukraine war, which incidentally led to Russia becoming India’s largest supplier of crude oil, also crippled Moscow’s refining capacity very badly.
Russia’s refining capacity has taken a major hit due to ongoing strikes and drone attacks from Ukraine. It is estimated that more than 40% of Russia’s refining capacity has been affected, forcing Moscow to increase crude oil exports and increase gasoline imports to meet domestic demand.Sourav Mitra, partner in oil and gas at Grant Thornton Bharat, cites estimates that Russian fuel production in June 2026 was significantly lower than the previous year. “The attacks had a material impact on Russia’s refining sector. Russian refinery output fell to its lowest level since 2009, with average refinery runs falling to around 4.69 million barrels per day by April 2026 amid repeated strikes on refining infrastructure,” he told TOI.What this has led to is a mismatch between Russia’s crude oil production and the country’s ability to produce refined petroleum products, especially gasoline. Gasoline production fell by about 25% year on year.“Due to peak demand in the summer, Russia faces a persistent structural supply deficit. As a result, about 78 out of 83 Russian regions reported gasoline shortages or supply disruptions.
Against this backdrop, Russia imposed temporary restrictions on gasoline exports to prioritize domestic fuel availability and began looking for imports to address supply shortages.
About 45% of Russia’s refining capacity, equivalent to about 3.3 million barrels per day, was offline in June due to the Ukrainian attacks, Nikhil Dubey, senior analyst at Kpler, told TOI.He adds that the main issue is not only the refining capacity that has been damaged, but also the loss of secondary conversion capacity.Why are these facilities important? They play a crucial role in converting intermediate products into marketable transportation fuels such as gasoline and diesel.“Compared to crude oil distillation units, these processing units are much more complex. Their restoration can take much longer because replacement equipment typically requires long lead times for manufacturing and delivery,” says Dube.This explains why Russia has been able to continue exporting products such as naphtha and fuel oil, even as domestic supplies of gasoline and diesel have come under greater pressure.
“The same trend also helps explain why India’s imports of Russian crude oil reached a record high in June. Russian refinery runs have fallen to the lowest level in the past decade, and weak demand from China has left more Russian crude available for export,” he adds.
India’s ability to supply Russia
Russia plans to import about 400,000 tons of gasoline per month from various countries, including Belarus, nearly tripling rail supplies to Russia to more than 70,000 tons in the first half of June. Interestingly, the Russian Parliament recently approved amendments to the tax code that provide subsidies for fuel imports. Mitra points out that this was calculated on the basis of India’s indicative gasoline price plus shipping costs from Indian ports, integrating India into Russia’s fuel subsidy structure.
Experts say that India is among the world’s largest gasoline exporters, with average foreign shipments of about 350-400 thousand barrels per day.According to Kpler data, Indian export markets range from California, where fuel standards are among the most stringent in the world, to countries in North and West Africa, where product specifications are relatively less stringent.Experts believe that this wide range of destinations highlights the ability of Indian refineries to manufacture different types of gasoline.
In Russia, domestic gasoline largely meets Euro-5 standards, specifications that Indian refiners already produce for both the domestic market and export customers, says Sumeet Ritolia, senior modeling and refining analyst at Kpler.As a result, Indian refineries are well equipped in terms of product quality to supply the gasoline grades Russia needs.Mitra says that India’s supply of gasoline to Russia, even through intermediate channels, strengthens its position as a pivotal global refining hub.
Russian raw materials are obtained mainly at discounted prices and premium products are introduced.“Russia’s gasoline shortage has created a new outlet for fuel imports. However, major Indian refiners have confirmed that they do not supply fuel directly to Russia. Following EU restrictions on products made from Russian crude and measures affecting Nayara Energy’s access to European shipping, insurance and financial services, any sales of Indian-origin fuel to Russia are likely to be through commercially mediated transactions rather than direct contracts between refiners and Russian buyers,” he adds.Prashant Vashisht, senior vice president and head of ICRA’s Corporate Ratings Associate Group, expects trade to continue until reforms take place in Russia.“Due to damage to Russian refineries in the ongoing conflict between Russia and Ukraine, the country has been importing petrol from India. This could continue till the time these facilities are repaired. However, the quantities will have little impact on India’s refining industry overall,” he told TOI.But what if this trade faces future US sanctions? The structure of trade itself reflects these constraints, says Mitra. “Indian authorities have insisted that there will be no direct sales of fuel from Indian refiners to Russia, while acknowledging that Indian-origin fuel may reach Russian buyers through intermediaries. Looking ahead, the main risks lie not in commercial demand, but in regulatory and geopolitical developments.”
These include tougher sanctions on shipping service providers, traders or financial institutions that facilitate such transactions, additional restrictions targeting Russian crude oil-based products, and broader geopolitical tensions affecting energy trade.“For India, the government’s position remains carefully calculated,” he adds. “New Delhi has emphasized that any transactions are business decisions taken by private entities and traders, and not Government directed exports. This distinction provides flexibility in managing diplomatic relations with both Western partners and Russia as the sanctions landscape continues to evolve.”