Russia and India’s complicated relationship hinges on oil
The two countries’ reliance on each other in the energy sector is coming under strain.
When it comes to oil, few countries have needed each other more than Russia and India in recent years. Now, that relationship is being tested.
The details
Indian Prime Minister Narendra Modi hosted Russian President Vladimir Putin in New Delhi this week, just months after President Trump imposed 50% tariffs on India as punishment for buying Russian oil.
Despite U.S. efforts to isolate Russia for its invasion of Ukraine, India has maintained warm relations with Moscow, offering it a crucial economic and diplomatic lifeline by buying its sanctioned crude throughout the war.
India has benefited from a deep discount since 2022 because of a patchwork of sanctions on Russian oil and the long voyage for tankers heading from Russia’s western ports to the subcontinent. But recent U.S. secondary sanctions threatened against entities trading with Russian state oil firms Rosneft and Lukoil are set to force India to cut back sharply on its purchases.
Buying oil from Russia has also left India with a giant trade deficit with Russia, something of a sore point for New Delhi and a major theme running through the visit.
The key point
Both leaders want to maintain their mutually beneficial energy relationship and show they can withstand U.S. pressure, without antagonizing Trump.
Moscow is eager to prevent India’s oil purchases from falling back to near zero—their level before the war. Oil is one of the Kremlin’s largest sources of revenue. India, a net importer of oil, relies on Russia for more than a third of its oil imports, up from just 2% before the war.
“We are ready to continue uninterrupted shipments of fuel," said Putin during a joint news conference with Modi on Friday.
The Indian leader, who spoke first, concentrated on the two countries’ cooperation over civil nuclear energy rather than oil. “Energy security has been a strong and vital pillar of the India-Russia partnership," he said.
What’s next
Energy market analysts expect India to remain a significant buyer of Russian crude while trying not to fall foul of sanctions. Russian officials said they are exploring mechanisms to keep oil supplies flowing.
Neither country has an appetite for provoking the U.S. right now. India is still pursuing a trade deal with the U.S. in hopes of reducing the tariffs. Meanwhile, the U.S. has restarted efforts to broker a Russia-Ukraine peace deal, a development that has been welcomed by Moscow, with caveats.
Progress on Ukraine has potential to lift pressure off the Russia-India relationship—and allow the oil to keep flowing. Anything that pushes a cease-fire further back would likely have the opposite effect.
Write to Tripti Lahiri at tripti.lahiri@wsj.com
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