According to people familiar with the situation who spoke to Reuters, Indian Oil Corporation (IOC), the biggest state-run oil refiner in the nation, has made significant moves to diversify its crude oil procurement strategy by obtaining supplies for delivery in March from Angola, Brazil, and the United Arab Emirates (UAE). As the country reduces its reliance on Russian crude in the face of changing global market dynamics and heightened Western sanctions against Moscow’s oil industry, this represents a dramatic change in India’s energy sourcing structure.
In an attempt to secure alternatives to Russian barrels, which had long been a mainstay of Indian oil imports because of low post-war discounts, IOC has reserved a total of 7 million barrels of crude oil for March loading. The purchases were made from a variety of foreign vendors, showing how India’s supply chain has expanded beyond its usual crude partners.
The refined oil landscape in India is undergoing a strategic recalibration, as refiners adjust to shifting geopolitical pressures, emerging Western sanctions, and ongoing trade negotiations, particularly with the United States. Experts say the move also strengthens India’s bargaining position in potential trade talks that could involve tariff adjustments if supply chains are realigned.
Details of New Crude Supply Deals:
The sources claim that IOC obtains barrels of crude from several suppliers in the Middle East, South America, and Africa. The 7 million barrels scheduled for March are broken out as follows:
- 1 million barrels of Abu Dhabi’s Murban crude, acquired from Shell.
- 2 million barrels of Upper Zakum crude from Mercuria, also originating in the UAE.
- 1 million barrels each of Angola’s Hungo and Clove grades, sourced from Exxon.
- 2 million barrels of Brazil’s Buzios crude from Petrobras under an optional supply agreement.
The optional contract framework with Petrobras offers some pricing flexibility, allowing IOC to negotiate terms based on prevailing market conditions and mutual agreements with the Brazilian oil company. While specific pricing details of these purchases were not disclosed, such contracts typically reflect broader negotiations that consider global benchmarks and logistical costs.
A significant diversification outside traditional Middle Eastern sources is indicated by India’s decision to incorporate these new supply streams, particularly Buzios oil from Brazil and West African grades like Hungo and Clove. According to analysts, this strategy could lessen supply concerns brought on by geopolitical volatility and help balance the mix of feedstocks used in refining.
Decline in Russian Oil Imports:
India has historically been one of the world’s largest buyers of Russian crude, capitalising on deep discounts that emerged after Moscow’s full-scale invasion of Ukraine in February 2022. These steep discounts made Russian seaborne barrels highly attractive to Indian refiners, helping lower fuel costs domestically and bolster refining margins.
However, since October 2025, tougher Western sanctions have complicated direct Russian oil purchases, prompting Indian refiners to scale back their imports. Trade sources indicate that Russian oil imports to India fell to their lowest level in two years in December 2025, even as OPEC members and other Middle Eastern producers increased their share of supply.
The decline in Russian crude purchases has accelerated the urgency for refiners like IOC to diversify. This trend is not limited to Indian Oil alone; other state-run refiners such as Bharat Petroleum Corp Ltd (BPCL) are also expanding their sourcing footprints. BPCL has reportedly planned a $780 million deal to purchase 12 million barrels of Brazilian crude oil in fiscal 2027, effectively doubling its intake from Petrobras. That move also supports India’s broader strategy to lessen dependence on Russian supplies.
The possible pressure from Western markets and regulatory frameworks is another factor in this change. With tariff considerations linked to geopolitical alignment and energy supply chains, India’s recalibration might enhance access to international markets. Therefore, obtaining a variety of crude sources could have both political and economic advantages.
