Archive · 11 Dec 2025
Indian refiners return to Russian crude
Some big Indian oil companies are buying Russian oil because it's very cheap.
Four of the seven largest companies are doing this, but one very important company, Reliance, is not buying Russian oil anymore because they don't want to get in trouble with the United States or Europe.
India is trying to balance getting cheap oil and not making other countries mad.
The amount of Russian oil India buys is going down, but it's still a lot.
The price of Russian oil is around $40–$45 per barrel.
India bought the most Russian oil in June, but that number is going down.
Some smaller companies have stopped buying Russian oil completely.
The stocks of these oil companies have gone down because of some problems, but some experts think they are a good deal because of low oil prices and other good things happening.
The government is also helping these companies by paying them back some money.
But there are still risks, like the government lowering fuel prices, which could hurt the companies' profits.
Four of India's seven largest refiners are purchasing Russian crude due to deep discounts.
Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp, and Nayara Energy are involved in these purchases.
Reliance Industries is avoiding Russian crude to avoid sanctions risks.
Russian crude is priced at $40–$45 per barrel in India, with imports expected to decrease but persist at a lower level.
Shares of OMCs have declined 6-9% due to volatile marketing margins, but fundamentals remain strong with gains from low crude oil prices and government reimbursements.
- Who
- Four of India's seven largest refiners, including Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp, and Nayara Energy
- What
- Are purchasing Russian crude oil due to deep discounts, while facing stock valuation challenges and marketing margin volatility
- When
- Recent purchases and looking for supply in January 2026
- Where
- India
- Why
- To take advantage of deep discounts on Russian crude oil, despite potential sanctions risks and volatile marketing margins
Optimistic View
Cautious View
Stock Valuation
Optimistic View
Shares of OMCs are undervalued due to sentiment-driven sell-offs, not fundamentals.
Cautious View
The sell-off reflects underlying risks from volatile marketing margins and geopolitical uncertainties.
Marketing Margins
Optimistic View
Marketing margins are expected to sustain or improve in Q4FY26.
Cautious View
Marketing margins are volatile and could decline further due to geopolitical disruptions.
Government Intervention
Optimistic View
Government reimbursements and lower LPG under-recoveries will boost cash flow.
Cautious View
Government decisions to reduce retail fuel prices could cut into OMC profits.
- Refiners Involved
- Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp, Nayara Energy
- Reliance Industries
- Avoiding Russian crude due to sanctions risk
- Russian Crude Price
- $40–$45 per barrel
- Peak Imports
- Over 2 million barrels per day in June 2025
- Expected Imports in December 2025
- 1.3 million barrels per day
- Expected Imports in January 2026
- Below 1.3 million barrels per day
- Reliance's Last Urals Cargo
- Due to deliver on December 17, 2025
- Expected Future Imports
- 1-1.2 million barrels per day
- Brent Crude Price
- $62 per barrel (current), $67 per barrel (H1FY26), $79 per barrel (FY25)
- LPG Under-recoveries
- ₹16,000 crore (FY26), ₹40,000 crore (FY25)
- Government Reimbursement
- ₹30,000 crore approved, ₹12,500 crore incremental cash inflow in last five months of FY26
- Enterprise Value to Ebitda Ratio
- BPCL: 5.6x, HPCL: 5.8x, IOC: 6.5x (below 10-year average multiples)
