India Can't Simply Stop Buying Russian Oil: Nirmala Sitharaman Explains Why

New Delhi: India cannot simply stop buying Russian crude oil and switch overnight to other suppliers because the global supply pool is limited, and such a move could push international oil prices higher, Finance Minister Nirmala Sitharaman said.

Speaking at the BusinessLine Changemaker Awards, Sitharaman said India has to consider the energy requirements of its population while responding to changing global geopolitical and trade conditions. She said the government would continue sourcing crude from different parts of the world depending on availability and suitability.

Why India cannot immediately replace Russian crude

Sitharaman pointed to the limited availability of crude in the international market as one of the main challenges.

She said that if India were to completely withdraw from the Russian market and seek the same volumes elsewhere, the available supply pool could become tighter, potentially pushing prices higher.

The minister also referred to recent disruptions involving oil facilities in the Gulf region, saying that such developments had reduced the amount of crude available in the global market.

For India, which has a population of about 1.4 billion, replacing a major source of crude would require supplies from multiple countries, she said.

Refinery compatibility is another challenge

Another factor highlighted by Sitharaman is the technical configuration of Indian refineries.

She said Indian refineries are largely equipped to process medium and relatively sour crude, with factors such as density and sulphur content influencing whether a particular grade can be processed efficiently.

This means that simply finding crude from another country does not necessarily guarantee an immediate replacement for Russian supplies. The alternative crude also needs to be compatible with existing refinery infrastructure, according to the finance minister.

India is diversifying its oil basket

Sitharaman said India is already diversifying its crude-oil basket and will continue to source energy from different parts of the world.

Her comments indicate that India's approach is not based on relying permanently on a single supplier but on maintaining access to crude that is available, technically suitable and economically workable.

Recent import data also shows some shift in India's crude sourcing. According to Reuters, India's Russian oil imports fell 16.5% in August 2026 to around 2.1 million barrels per day, while preliminary data suggested imports could decline further to around 1.9 million barrels per day in September. Russia nevertheless remained India's largest crude supplier.

US pressure over Russian oil purchases

Sitharaman's comments come amid increasing pressure from Washington on countries that continue to purchase Russian energy.

A recently enacted US sanctions law gives the US president powers to impose tariffs of up to 100% on countries that are major buyers of Russian oil and gas. India and China are among the countries potentially affected by the measure.

The issue has therefore become both an energy-security and trade-policy concern for India.

Energy security remains a key consideration

Sitharaman said India would make decisions based on the availability of crude and the country's energy requirements.

The government has maintained that its oil purchasing decisions are guided by energy security and market considerations. At the same time, the recent fall in Russian imports suggests Indian refiners are already adjusting their sourcing mix as global conditions change.

For India, the challenge is therefore not simply whether to buy Russian oil or stop buying it. It also involves ensuring that alternative supplies are available in sufficient quantities, can be processed by domestic refineries and do not create a sharp increase in energy costs.