Russia replaces UAE as India’s top naphtha supplier in 2024-25

Russia Becomes India’s Leading Naphtha Supplier, Overtaking UAE in 2024-25

New Delhi (Reuters) – Russia has surpassed the United Arab Emirates (UAE) to become India’s top supplier of naphtha in the financial year ending March 2025, as Indian refiners take advantage of discounted Russian cargoes. Preliminary ship-tracking data suggests that this trend is likely to continue for another year.

India, the world’s third-largest crude oil importer and consumer, has been relying on cheaper Russian oil to cut down import costs despite ongoing Western sanctions aimed at restricting Moscow’s revenue amid the Ukraine conflict. For the past two years, Russia has maintained its position as India’s top crude supplier, and its influence in the naphtha market has now significantly expanded.

Surge in Russian Naphtha Imports

Between April 2024 and March 2025, India imported around 3 million tons (approximately 74,000 barrels per day) of naphtha. More than half of this supply came from Russia, a sharp increase from the 14%-16% share recorded in the previous year, according to data from OilX and Kpler.

Russian naphtha, exported from Ust-Luga, Sheskharis, and Novorossiysk ports, was delivered to western Indian ports such as Mundra, Hazira, and Sikka. The shipments were primarily intended for petrochemical facilities owned by HPCL Mittal Energy Ltd (HMEL) and Reliance Industries (RIL).

“We will buy from wherever it is cheaper,” HMEL’s Chairman Prabh Das stated at an industry event, without commenting on the company’s direct purchases from Russia. Reliance Industries did not respond to media inquiries.

Cost Advantage and Declining UAE Share

Russian naphtha was priced $14-$15 per ton cheaper than Middle Eastern alternatives as of this week, according to two market sources. The price advantage has made Russian supply more attractive to Indian refiners, who are dealing with lower-than-expected profit margins in the domestic market.

The UAE’s share of India’s naphtha imports fell to just over 20%, nearly half of its previous level, while Russia’s share increased. Abu Dhabi National Oil Company (ADNOC), formerly a leading supplier, was primarily affected by the decline.

A representative from an integrated refining complex in northern India confirmed that cost remains the primary factor driving purchase decisions. “Prices have been attractive for us, and we will continue to purchase from them (Russia),” the source said.

Growing Demand and Geopolitical Shifts

India ranks seventh among Asian naphtha importers, according to Kpler data. However, imports are expected to rise in the coming years due to increasing domestic petrochemical demand and new cracker projects scheduled for completion within the next 3-4 years.

Russia has redirected its naphtha exports towards Asia following Europe’s ban on Russian oil imports in response to the 2022 Ukraine invasion. Despite this shift, a potential Ukraine ceasefire deal under discussion by the Trump administration could lead to the lifting of U.S. sanctions on Russian oil, analysts suggest.

However, Rystad Energy analyst Jorge Leon believes that even if U.S. sanctions are eased, Europe may still avoid Russian oil imports, keeping Asia as Russia’s primary oil and naphtha market.

India’s Naphtha Import Breakdown (in 1,000 metric tons)

With Russia securing over half of India’s naphtha imports, its dominance in the sector is expected to persist, reshaping energy trade dynamics in the region.