• India's crude oil imports from Russia have declined in recent months, with Russia's share slipping as US imports surged.
  • Moody's Ratings indicates India is unlikely to abruptly halt all Russian purchases despite a recent India-US trade deal, citing economic risks.
  • The shift toward suppliers like the US and UAE enhances India's energy security while supporting refining margins amid lower global crude prices.

Russia's Foreign Ministry stated on Thursday that it has no reason to believe India has reconsidered its approach to purchasing Russian oil, according to people familiar with the matter. This comes amid reports of declining Russian crude imports to India and the recent announcement of an India-US trade deal, with ongoing negotiations expected to shape final terms.

India's crude oil imports from Russia declined in April-November FY26, with Russia's share slipping as US imports surged to 8.1% from 4.6% the prior year. Other suppliers like the UAE (11.1%), Egypt (1.4%), Nigeria (3.3%), and Libya (0.5%) also saw increases, reflecting a broader diversification effort that reduces India's reliance on Russia—a discounted supplier since the Ukraine conflict. This move enhances energy security for the world's third-largest oil importer and supports refining margins, with global crude prices down 15.4% in FY25. Moody's Ratings noted that India is unlikely to abruptly halt all Russian purchases post-trade deal, citing risks to economic growth and inflation, despite recent reductions. An analyst from Moody's, who requested anonymity due to the sensitivity of the matter, said, "A sudden stop could disrupt sectors like pharmaceuticals and electronics, making continuity more likely."

Efforts to finalize the India-US trade deal have hit a snag, with details remaining unclear and exemptions for some sectors from 50% tariffs still under discussion. The deal targets $500 billion in bilateral trade by 2030, with longer-term visions of $25-35 trillion, aligning with US pushes for more LNG and crude exports to allies. Russia's ministry views India's approach as unchanged, signaling no policy shift despite the diversification trend. Without a stable supply framework, India could face inflationary pressures, but the undervalued Indian rupee cushions against US tariffs and higher import costs. Stakeholders like refiners benefit from current margins, but abrupt changes risk growth disruptions. Attempts to reach officials from India's trade ministry for comment were unsuccessful as of Friday morning.

In related developments, the broader FY26 Economic Survey highlights resilient trade and rupee undervaluation amid oil shifts, while global oil market softening aids diversification. Experts predict continuity in Russian purchases to avoid economic shocks, with the US trade deal seen as positive for bilateral interests without foreclosing Russian ties. This story will be updated as more information becomes available.