According to reports by Reuters, Indian refineries are securing significant margins by exporting fuel back to Russia, leveraging the deepening discounts on Russian crude. Over the past two weeks, the discount for Russian Urals oil at Indian ports has widened from approximately $4 to $7 per barrel relative to the Brent benchmark. This price adjustment is largely driven by a global surplus of crude and increased supply flows from Gulf nations.
The mechanism involves India purchasing Russian crude at a discount, refining it into products such as gasoline, and shipping the refined fuel back to Russia. This trade route has become a lifeline for Moscow, which is struggling to mitigate severe domestic fuel shortages triggered by persistent Ukrainian drone strikes on key Russian energy infrastructure. Reports indicate that at least 60,000 tons of gasoline have already been shipped from India to Russia, with two more tankers expected to arrive shortly.
While the current discount levels remain below the 2022 peak of $10 per barrel, the structural dependence on Indian-refined fuel highlights the growing fragility of Russia’s domestic refining capacity. The Kremlin has confirmed that it is actively negotiating fuel imports from foreign partners to stabilize the domestic market, which is currently managed in an ad-hoc, manual fashion by the Russian government.
This circular dependency—shipping raw crude to India only to repurchase finished gasoline—significantly inflates logistical costs and erodes the profitability of the Russian energy sector. Furthermore, it creates a new layer of vulnerability for Moscow, making its domestic fuel stability contingent on external geopolitical factors and Indian trade policies. As Russia continues to face the consequences of its aggression, the attrition of its own energy infrastructure remains a critical factor in the ongoing conflict, forcing it to seek increasingly expensive and politically sensitive solutions to maintain its internal fuel supply chain.