Recent trade flows have indicated that petrol produced in India has reached Russia through international trading channels rather than through direct sales by Indian refiners, ToI reported on July 11. The development highlights how shifts in global energy markets and sanctions have reshaped petroleum trade routes since the outbreak of the Russia-Ukraine conflict.
Union Petroleum and Natural Gas Minister Hardeep Singh Puri has clarified that Indian companies are not directly exporting petrol to Russia. According to the minister, any purchases involve Indian-origin fuel acquired by international traders before reaching Russian buyers, rather than government-backed or company-to-company supply arrangements.
The shipments have drawn attention because Russia has traditionally been a major exporter of refined petroleum products. However, repeated attacks on its refining infrastructure have significantly reduced its ability to meet domestic fuel demand.
Industry experts say sustained drone strikes and military action have damaged a substantial portion of Russia’s refining capacity over the past year. The disruption has lowered refinery throughput and widened the gap between crude oil production and the country’s ability to convert it into transportation fuels such as petrol and diesel.
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According to industry estimates, refinery utilisation in Russia has fallen to multi-year lows, resulting in a sharp decline in petrol production. The shortfall has led to fuel supply disruptions across several regions during the peak summer consumption season, prompting Moscow to curb petrol exports and look overseas for additional supplies.Analysts also point out that the challenge extends beyond damaged crude distillation units. Several secondary processing facilities, which convert intermediate products into high-value transportation fuels, have also been affected. These units are technically more complex and typically require specialised equipment with long manufacturing and delivery timelines, delaying restoration efforts.
The disruption explains why Russia has continued exporting products such as fuel oil and naphtha while facing tighter domestic supplies of petrol (also known as gasoline in many markets) and diesel, ToI’s report (by Smriti Jain) said.
Reports have suggested that a cargo of petrol loaded at Nayara Energy‘s Vadinar refinery followed an indirect trading route before heading towards Russia. Market participants say such transactions illustrate the increasingly opaque nature of global energy trade, particularly where sanctions and shipping restrictions are involved.
Nayara Energy, which processes Russian crude, has relied on international traders for crude procurement and refined product exports after European restrictions tightened on products derived from Russian oil.
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Experts say India is well positioned to meet demand for multiple petrol specifications because of its sophisticated refining sector. The country exports roughly 350,000-400,000 barrels of petrol a day to destinations ranging from North America to Africa, producing fuel that complies with varying quality standards, including Euro-5 specifications used in Russia.
India’s ability to process discounted Russian crude into refined fuels for global markets has strengthened its role as a major refining hub. The emergence of Russia as a potential destination, albeit through intermediary traders, reflects the flexibility of India’s refining industry in responding to changing international demand.
Russia is also reported to be planning sizeable petrol imports from multiple countries, including Belarus, while introducing tax measures to support imported fuel as domestic production remains constrained.
Rating agency ICRA expects Russian demand for imported petrol to persist until damaged refineries are restored. However, analysts believe the volumes involved remain too small to materially affect India’s overall refining sector, given the country’s large export base.
At the same time, experts caution that geopolitical and regulatory risks remain elevated. Any expansion of sanctions targeting shipping companies, commodity traders, insurers or financial institutions involved in Russian energy trade could alter existing supply chains.
For India, the government’s position has remained consistent. Officials have maintained that any movement of Indian-origin fuel to Russia is the result of commercial transactions undertaken by traders rather than direct exports by Indian refiners. That distinction is expected to remain important as global sanctions and energy trade dynamics continue to evolve.