Kpler expects Russian crude imports into India at around 1–1.2 million barrels per day (mb/d) in February 2026, easing towards roughly 800-1,000 thousand b/d (kb/d) next month.
| Photo Credit:
istock.com
As India begins reducing its Russian crude oil imports, under pressure from the US, its overall crude oil import bill is expected to increase by $2-3 per barrel, which can be offset by Venezuelan barrels, albeit partially.
Global real time data and analytics provider Kpler said that India is not positioned to fully replace Russian barrels without cost, from a market structure perspective.
“Russian grades have provided a rare combination of medium sour quality, stable availability, and discounted pricing, which has been particularly valuable for complex refiners optimised for sour processing,” it pointed out.
Sumit Ritolia, Kpler’s Lead Research Analyst for Refining & Modeling told businessline, “As India reduces Russian barrels, the overall crude cost is expected to go up $2-3 per barrel. However, cheaper Venezuelan crude buying could partially offset this. Again, Venezuelan crude import will only be at a marginal or supplementary level and cannot replace Russian barrels.”
That said, Venezuelan supply is structurally constrained by production limits, logistics, and compliance risks. It is unlikely to fully replace Russian volumes, but it can help reduce the cost impact at the margin end if flows continue to build, he added.
Kpler expects Russian crude imports into India at around 1–1.2 million barrels per day (mb/d) in February 2026, easing towards roughly 800-1,000 thousand b/d (kb/d) next month.
“However, we continue to see this as a short-term stabilisation rather than a return to the mid-2025 peak, and we expect Russia’s share in India’s crude slate to gradually stabilise to a lower range in 2026 compared to 2024/ 2025 as commercial and policy frictions build,” Ritolia anticipated.
Last week, ratings agency CareEdge said “Going forward, a compelled shift away from Russian crude toward a blend of Venezuelan, US and Middle Eastern grades is likely to increase the weighted average cost of India’s crude oil sourcing by $1.5–2 per barrel, directly compressing the GRM premium that Indian refiners have enjoyed in recent years.”
Hardik Shah, Director at CareEdge Ratings, said that Indian downstream oil sector’s performance is currently driven by the dual engines of high gross refinery margins (GRMs) and healthy marketing margins.
“As we transition into FY27, the narrative is likely to shift from high GRMs to moderate but sustainable GRMs. While GRMs are expected to moderate from their recent peak levels due to global supply pressures and realignments in crude oil sourcing, they are likely to settle at $6–$8 per barrel, which is accretive to the historical average,” he explained.
On favouring Urals over US or Venezuelan crude, a refinery official explained that refinery margins factor in multiple variables such as crude differentials, processing yields, product pricing and operational efficiency metrics. Urals, Arab Medium or for that matter Merey (Venezuela) have different API gravity and sulphur content. Each has a different impact on processing costs, product yields and margin realisation.
“Indian refiners such as IndianOil (IOCL) and Reliance Industries (RIL) have sophisticated and complex refinery operations with advanced crude slate optimisation. What it does is that it maximises processing flexibility, thereby offering better margins. Overall, Indian refineries are optimised for medium sour grades, which gives more diesel. Light sweet crude gives petrol and naphtha. While petrol consumption is growing in India, naptha is a low margin product,” the official added.
Indian refineries can process Merey, but its utility is limited largely to sophisticated set ups such as those operated by RIL and IOCL. Arab Medium (Saudi Arabia) and Basrah (Iraq) are the best replacements for Urals. Similarly light sweet crude (WTI and Bonnie Light) also have limited utility. Of course, the crude mix can be changed, but it will come at a cost, he emphasised.
Published on February 22, 2026