To ensure Russian petrol stations have not only queues and fistfights but something to actually sell, supplies are now being shipped across the Indian Ocean and through the Suez Canal. At least 67,000 tonnes of petrol have been shipped from India to Russia, as Ukrainian strikes on oil refineries have forced one of the world's largest oil-producing countries to turn to imports.
At the beginning of July, Russian refineries were meeting only about 65% of seasonal petrol demand. A wave of Ukrainian attacks on Russian fuel facilities reduced oil refining volumes in Russia to their lowest level in more than 21 years. In some regions, drivers queued for fuel, petrol stations imposed sales limits, and in occupied Crimea, fuel was not sold to ordinary motorists at all on certain days.
The Russian authorities expect imports, the use of reserves and the completion of refinery repairs to stabilise the market. Read on to find out who has sold Indian petrol to Russia, how much Moscow will pay for it and how much of the shortfall tanker shipments can actually cover.
A Russian plant with an Indian address
The petrol for Russia has been produced by the Nayara Energy refinery in Vadinar, western India. The plant is almost half-owned by Rosneft, a Russian state-controlled oil giant, which holds a 49.13% stake, is subject to EU sanctions and processes Russian crude. An equal stake is held by a consortium led by the Russian investment group UCP. Legally, the refinery is Indian, but Russian shareholders own more than 98% of its operator.
In July 2025, the EU imposed sanctions on Nayara, which prompted suppliers of non-Russian crude to stop doing business with the company. The plant switched entirely to Russian crude. The sanctions also complicated payments and shipping, so Nayara buys crude and sells the fuel it produces through traders.
This is how the petrol reaches Russia. Although the Indian authorities insist that the country's companies do not supply fuel to Russia, they have acknowledged that Moscow can purchase Indian petrol from traders. As a result, fuel refined from Russian crude at a predominantly Russian-owned refinery returns to Russia after travelling 14,000 km by sea. The refining process and the long voyage come at global market prices.
"Some of Nayara Energy's profits could ultimately flow to Rosneft through dividend payments. However, these are isolated shipments rather than sustained, large-scale exports that would materially affect Nayara's financial performance. In transactions like these, the largest share of the profit is typically captured by traders and shipping service providers," Yuliia Pavytska, Head of Sanctions at the KSE Institute, explained to Ekonomichna Pravda.
A route with tracking beacons switched off
The first shipment was carried by the Cameroon-flagged tanker Agni, which loaded its cargo in Vadinar on 20 June. Shipping documents listed Fujairah in the UAE (a major port just west of the Strait of Hormuz) as its destination. Instead, the vessel sailed past the port, transited the Suez Canal and continued north.
Defence Intelligence of Ukraine (DIU) traced the vessel's subsequent route. According to the agency, the Agni transported nearly 67,500 tonnes of petroleum products from the Nayara terminal. Near the Egyptian city of Port Said, the tanker rendezvoused with the Garnet to transfer the cargo. During the ship-to-ship transfer, both vessels switched off their Automatic Identification System (AIS) transponders. Tankers linked to the Russian and Iranian shadow fleets frequently do this to hinder tracking and conceal cargo transfers.
The Garnet then transmitted a message claiming that it was sailing empty and had passed through the Strait of Gibraltar by mid-July. DIU believes the shipment is likely destined for the White Sea port of Vitino or one of Russia's Baltic ports.
The DIU website lists both tankers as belonging to Russia's shadow fleet. The Agni is linked to India's Gatik Ship Management, which has transported oil in Rosneft's interests. The Garnet is linked to companies affiliated with Russia's state-owned shipping giant Sovcomflot.
"The sale of petrol from India to Russia does not, by itself, violate sanctions. There are no sanctions prohibiting trade in petroleum products between the two countries, and neither the EU nor the US has the legal authority to ban trade between third countries. For that reason, these exports should not, on their own, be regarded as a sanctions breach," Pavytska said.
She added that the continued operation of these vessels despite the sanctions imposed points not so much to shortcomings in the restrictions themselves as to weaknesses in their enforcement. Pressure should therefore be stepped up not only on the vessels themselves, but also on their owners, managers, operators, insurers and other parties involved in their operation.
Who will pay for the long journey?
The value of the shipment has not been disclosed, but it is certain to have exceeded domestic Russian prices. Petrol is cheaper in Russia than on international markets. Importing it from India means paying global market prices, with the additional costs of shipping, ship-to-ship transfers and insurance.
In June, the average wholesale price of AI-92 petrol in Russia stood at RUB 66,500 (about US$848) per tonne. The equivalent price on external markets, including export costs, was RUB 98,900 (US$1,261) per tonne.
If an imported tonne costs RUB 90,000 (US$1,148) after delivery and the current wholesale price is RUB 70,000 (US$893), the supplier will lose RUB 20,000 (US$255) per tonne unless it receives compensation. Under such conditions, it will either refuse to import or agree to supply only if its revenues increase at least to the level of its costs.
"From a financial point of view, importing petroleum products from India that are refined from Russian crude makes little economic sense. The final cost of such fuel will be significantly higher due to the lengthy and expensive logistics and the margins of all participants in this supply chain. This is not an economically efficient solution but a costly stopgap measure aimed at preventing even greater losses," Pavytska said.
The Russian authorities have decided to cover the price difference from the budget. To do this, they have extended the fuel damper mechanism to importers. Previously, under this mechanism, the state paid subsidies to Russian refineries to make it more profitable for them to sell petrol domestically rather than abroad. Now the budget will also be able to support importers.
For petrol from India, a reference price will be determined each month as the price of the Indian AI-92 benchmark plus the costs of sea transport, transshipment at a Russian port and excise duty. This amount will be compared with the wholesale price in Russia. If imports prove more expensive, the company will receive compensation from the budget.
"The Russian market is not ready for market prices. The authorities will have to spend large sums on subsidies and drain the budget or allow prices to rise, which will damage the authorities' reputation," said Serhii Kuiun, director of the Ukrainian fuel market consultancy A-95 Consulting Group.
According to Ekonomichna Pravda's calculations, with imported fuel costing RUB 80,000-90,000 per tonne, the first shipment of fuel from India will cost Russia RUB 5.4-6.1 billion (US$68.9-77.8 million), excluding storage, delivery to the regions and sellers' margins. The budget may compensate importers by RUB 43,500-53,500 (US$555-682) per tonne, or RUB 2.9-3.6 billion (US$37-45.9 million) for the first shipment.
Will imports cover the shortage?
At the beginning of July, Russia was consuming 115,000-120,000 tonnes of petrol per day, while domestic production covered about 65% of demand. The country faces a daily shortfall of 40,000-45,000 tonnes, or 1.2-1.35 million tonnes of fuel per month. The 67,500 tonnes of petrol from India would cover only a day and a half of the current shortage.
Meanwhile, Russia is seeking to increase supplies from India. Rosneft, Gazprom Neft and Lukoil have approached Indian oil refiners for additional petrol, but representatives of three state-owned Indian companies said they had no spare volumes available.
Overall, Russia plans to import up to 400,000 tonnes of petrol per month from various countries. Even if the plan is fulfilled, the imports would cover only about a third of the shortfall. The market would still face a deficit of up to 950,000 tonnes of petrol per month.
"Bringing in such a volume will be challenging, and even if it can be done, distributing the fuel across the country will pose logistical challenges," Kuiun said.
Belarus is expected to provide part of the planned supplies. In June, Belarusian refineries were supplying up to 6,000 tonnes of petrol per day to Russia. This amounts to 180,000 tonnes of petrol per month, or nearly half of the planned imports. Moscow also tried to purchase another 50,000 tonnes of petrol from Kazakhstan.
The Russian authorities plan to cover the remaining shortfall by drawing on reserves and bringing refineries back online after repairs. Russia has also banned exports of petrol, diesel fuel and aviation kerosene, while producers have been allowed to sell fuel that does not meet current environmental standards. The government is also discussing the temporary return of Euro-2 petrol, which has been banned since 2013.
Sergei Vakulenko, a senior fellow at the Carnegie Russia Eurasia Center in Berlin, said that the amount of oil refining capacity available to Russia for the third year running has depended on whether Ukrainian drones or Russian repair crews move faster. According to Vakulenko, Kyiv gains the upper hand if it can keep up the frequency of its attacks and continue to increase the damage they cause. He said that is the current trend.
If there are no new strikes, Russia's situation may improve at the end of July. Experts believe that the resumption of operations at some refineries and fuel imports will stabilise the situation. However, if Ukrainian strikes continue and remain effective, the breathing space gained thanks to fuel from India will quickly disappear.
Artur Kryzhnyi
Translated by Myroslava Zavadska
Edited by Artem Yakymyshyn