In the wake of geopolitical tensions and economic pressures, India’s decision to ramp up purchases of discounted Russian oil has sparked debate. As the world’s third-largest oil importer, India has turned to Moscow for affordable energy supplies, especially since Russia’s invasion of Ukraine in 2022. But who reaps the real rewards from this strategy—the everyday citizen facing fuel costs, or business tycoons like Mukesh Ambani, whose Reliance Industries has emerged as a key player? Experts and data from reliable sources paint a nuanced picture, highlighting benefits for both, though the scales may tip differently.
The Shift to Russian Oil: A Strategic Move Amid Global Chaos
India’s oil landscape transformed dramatically after Western sanctions sidelined Russian exports from Europe. Prior to the conflict, Russia supplied less than 2% of India’s crude needs, but that figure surged to around 35-40% by 2025. This pivot allowed India to secure oil at steep discounts, often $4-5 per barrel below global benchmarks, according to market analyses.
Analysts from firms like JPMorgan and Kpler emphasize that this isn’t just opportunism—it’s a calculated response to energy demands. With over 85% of its oil imported to fuel a population exceeding 1.4 billion, India prioritizes affordability and supply stability. Experts point out that without these imports, global oil prices could spike, echoing the $137 per barrel peak seen in 2022. In conversations on platforms like financial news channels, economists argue this approach has buffered India against inflation, indirectly benefiting consumers at the pump.
Public Benefits: Lower Costs and Energy Security
For the average Indian, the influx of cheap Russian oil translates to tangible savings. State Bank of India estimates that halting these imports could inflate the nation’s fuel bill by $9-12 billion annually, potentially driving up domestic prices. By contrast, the discounted crude has already shaved $7-10 billion off India’s import costs in recent years, helping stabilize retail fuel rates.
Government revenue has also swelled through windfall taxes on these imports, funding public infrastructure and subsidies. As one energy expert noted in a Reuters analysis, India’s purchases have prevented a broader global price surge, which would otherwise burden households worldwide. This view aligns with U.S. officials’ past acknowledgments that such buys align with efforts to cap Russia’s war funding while keeping energy markets steady. In essence, the public gains through moderated inflation and enhanced energy security, especially as India diversifies sources from 40 countries including the Middle East and Africa.
Ambani’s Reliance: A Major Player in the Mix
Enter Mukesh Ambani’s Reliance Industries, India’s largest private refiner and the top buyer of Russian crude since 2022. The company has locked in long-term deals with Rosneft, securing up to 500,000 barrels daily—far outpacing state-run entities. This has boosted Reliance’s refining margins, with estimates suggesting annual benefits exceeding $8 billion during peak discount periods.
Financial reports highlight how Reliance’s access to low-cost feedstock has fueled exports of refined products like diesel to Europe, averaging 2.83 million barrels monthly. Analysts from Marcellus Investment Managers warn that any disruption could squeeze these profits, underscoring Reliance’s heavy reliance on Russian supplies. Yet, experts stress this isn’t isolated gain; Reliance’s operations contribute to India’s overall fuel supply chain, indirectly supporting public access to affordable energy.
Expert Analysis: Balancing Act or Uneven Split?
Diving deeper, insights from outlets like CNBC and The New York Times reveal a consensus: India’s strategy is “purely economic,” not geopolitical favoritism. Amitabh Singh, a professor specializing in Russian studies, describes it as a commercial necessity, given India’s domestic production shortfall. However, critiques in financial discussions suggest corporate giants like Reliance capture a disproportionate share of the windfalls through enhanced profitability and market dominance.
On the flip side, Nomura and Morgan Stanley economists note narrowing discounts—to just $2-3 per barrel in 2024-25—making diversification feasible without massive public fallout. If U.S. pressures, such as recent tariff threats from President Trump, force a pivot, India could lean on traditional suppliers like Iraq and Saudi Arabia, potentially cushioning costs. YouTube analyses from channels like Bloomberg Markets echo this, with experts debating that while Ambani’s empire thrives, the broader economy—and thus the public—avoids steeper energy crises.
The Road Ahead: Geopolitical Pressures and Domestic Realities
Amid Trump’s vows to penalize Russian oil buyers, with tariffs on Indian goods now at 50%, refiners face tough choices. State entities have paused spot purchases, but long-term contracts persist, signaling India’s intent to maintain imports. Kpler’s Sumit Ritolia warns that abrupt changes could strain refining operations and profitability.
Ultimately, while Reliance stands to gain from continued access, the public benefits through cost savings and stability that ripple across the economy. As global dynamics evolve, India’s oil strategy remains a high-stakes balancing act, with experts urging a measured approach to safeguard both national interests and consumer wallets.
3 thoughts on “Who Truly Benefits from India’s Purchase of Russian Oil — The Public or Ambani?”