The $16 Billion Loophole Of Oil Imports
How Europe and the United States of America Were Secretly Buying Russian Oil Through India and how Indian Companies earned billions in…
The $16 Billion Loophole Of Oil Imports
How Europe and the United States of America Were Secretly Buying Russian Oil Through India and how Indian Companies earned billions in profit due to it.
On February 2, 2026, President Donald Trump announced on social media that the United States had reached an agreement with India to roll back tariffs on Indian imports from 50% to 18%. In exchange, India has reportedly agreed to eliminate tariffs and non-tariff barriers on US goods, with the stated goal of bringing these barriers “to ZERO.” The deal also includes India’s commitment to stop purchasing Russian oil and increase imports of US energy, technology, agricultural, coal, and other products.
Now looking at this deal, you would assume that India and the USA are going towards cordial relations and global cooperation, promoting bilateral trade to give profits to both countries. However, that is not the case, because the reason why these tariffs reached 50% in the first place was because President Donald Trump wanted to strong-arm India into stopping the purchase of Russian oil. This is blatant terrorism. And now? The White House has given “permission” to India to buy oil from Russia due to the ongoing fuel crisis. Is India a colony or a free country?
According to President Donald Trump, the reason for increasing the tariffs from 25% to 50% on India was because India continued the purchase of Russian oil despite the “warnings" given to the Indian government by the US government. Not only this, India has been condemned at a global level for purchasing Russian oil as it is believed that by purchasing Russian oil India is actively funding the Russia-Ukraine war. Given below is a detailed breakdown of, the purchase of oil by different countries, from Russia after the ban set upon the purchase of Russian oil by the European Union, published by https://energyandcleanair.org
Countries purchasing Russian oil after the EU ban (until June 2025)
China became Russia’s single largest customer for crude oil. Beijing, which never joined Western sanctions, bought huge volumes of cheap Russian crude oil, often routed via shadow fleet tankers, ship-to-ship transfers at sea, or through third countries.
Despite countries like Turkey and China repeatedly purchasing oil and oil products from Russia at a larger quantity than India, India was targeted again and again by the American President, and these both countries were never treated in the way that India was treated.
Due to the imposed tariffs in India, namely 50% by the USA, many Indian industries suffered and following are some examples:
The 50% tariff imposed by the US on Indian exports has impacted MSME exporters across India, especially the textile industry.
Tirupur-based textile exporter V Perinbaraajan is one of those heavily dependent on the US market. “Before the tariff hike, we shipped one lakh garments to the US; now production has almost come to a standstill,” says the managing director of Sutharshika Apparels. ‘We packed 30,000 pieces about two months ago, but the stock remains unsold.”
Despite these helpless situations amidst the already huge unemployment right now, the recent deals with USA and NATO seem to provide some relief to Indian consumers and exporters.
Moving on to the next and most alarming segment of this crisis, that is, answering the question of “Where does all of this oil go?”. Just to emphasize the volume of the oil purchased, before the Ukraine war in 2022, Russia supplied just ~2.5% of India’s oil imports — by 2024–25, that figure had surged to 35.8%. Now you would think, all of this oil going to India from Russia, millions of barrels per day, they must be going to citizens right? RIGHT? Sorry to disappoint you, reader. Only about 20–25% reached Indof it went to the people of India. That’s right, only 20% of the Russian oil reached the refineries like Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL). Where did the other 80% vanish? Well, it may come as a shock to you but it was purchased by mainly 2 companies.
Reliance Industries and Nayara Energy.
WHATTTTT
Reliance, operating the world’s largest single-site refinery complex at Jamnagar, was by far the dominant buyer, taking roughly half of all Russian crude entering India. Russian crude oil from Reliance was used primarily to produce petrol, diesel, and aviation turbine fuel (ATF) that was then exported to Europe and the US at market prices, generating enormous profit margins. After EU sanctions in November 2025, Reliance halted Russian crude at the export refinery but continued at the domestic one. Reliance exported €17 billion worth of refined fuels made from Russian crude to the EU alone. The mechanism was simple: buy Russian Urals crude oil at a $13/barrel discount, refine it into diesel, petrol, and aviation turbine fuel (ATF), and sell at full market prices to European buyers.
The second-largest consumer was Nayara Energy, whose Vadinar refinery in Gujarat is India’s second-largest private refinery. Crucially, Nayara is majority-owned by Russia’s Rosneft, making it essentially a captive buyer. In 2025, Nayara sourced an average of 66% of its crude from Russia. Though a large part reached the domestic market, it was with a huge profit margin that was a burden put on the consumers, a situation that could’ve been easily avoided by the government. That is if they wanted to.
Together, Reliance and Nayara earned a combined $16 billion in profit alone from this genius loophole of supplying the discounted Russian crude oil as exports to the EU and US rose.
Reliance and Nayara after the profits.
Now you may ask, what’s the situation with this free money glitch that these two companies had figured out. Well good news, the loophole has been closed. The EU’s 18th sanctions package, specifically Article 3ma, came into force on January 21, 2026, banning imports of refined petroleum products derived from Russian crude processed in any third country.
The current situation, however, is very different than what seems to be with the many treaties and sanctions, all due to the capturing of the Venezualen President Nicholas Maduro and the Israel-Iran conflict. Everything changed when the Strait of Hormuz was effectively disrupted by the widening USA-Israel-Iran conflict, cutting off India’s primary Middle Eastern supply routes. India sources 88% of its crude from abroad, with roughly 2.6 million bpd normally flowing through the Hormuz strait. With that in jeopardy, India had a fuel crisis at it’s hands.
The Strait Of Hormuz
Now, the White House, in a statement said that it “allows” the Indian Government to buy oil from Russia. That’s right “allows”. Reminds me of the time when Queen Elizabeth ruled over India as a colony. The USA had issued a 30-day sanctions waiver on March 5, 2026, which ended yesterday on March 3, 2026. The EU is simultaneously preparing a 20th sanctions package that would include a full maritime services ban, which could make it much harder to physically ship Russian crude to India regardless of whether India wants to buy it. India is essentially caught between energy security on one side and its relationships with the US and EU on the other.
But it isn’t the end of the world for India since, Tehran has said the Strait of Hormuz is open to all except the US and its allies on 2nd April, 2026. On 29th March, Iran’s ambassador to India, Mohammad Fathali, said Tehran had allowed some Indian vessels to pass through the Strait of Hormuz in a rare exception to the blockade that has disrupted global energy supplies. Fathali did not confirm the number of vessels. However, on the same day, New Delhi said two Indian-flagged tankers carrying liquefied petroleum gas bound for ports in western India had passed through the strait.
That’s all I think there is to know, about the current oil situation. I just have one question for you at the end of this for all the readers. Who do you think benefitted the most out of this?
SOURCES:
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