India’s reliance on Russian crude has climbed to about 44% of imports by volume in April–July 2026, up from 23% in January–February 2026 and 2% in 2021, increasing exposure as the US Russia sanctions bill raises the prospect of additional tariffs of up to 100% on countries importing Russian energy, subject to presidential discretion and trade negotiations. The shift has accelerated since the Middle East crisis, reframing India’s oil supply mix and concentrating risk around one supplier.
Since the conflict, the Middle East share of India’s crude imports has dropped to 30% in April–July 2026 from 55% in January–February 2026, with Russia covering most of the gap, while renewed flows from Venezuela and Iran have offered only modest relief. Standard Chartered estimates the discount on Russian crude has delivered annual savings of 0.1–0.2% of GDP since 2022, and those gains are described as fading; a material reduction in Russian dependence would require restoration of supplies from the Middle East and Venezuela.
Energy Market Volatility and Tariff Risk
We advise derivative traders to prepare for heightened volatility in energy and currency markets in the coming weeks as India’s massive reliance on Russian crude—now at 44% of its imports—collides with US tariff threats. With a potential 100% tariff looming under the latest US sanctions bill, any sudden policy shift will trigger sharp swings in global crude benchmarks. Traders should look to buy near-term straddles on Brent crude to capitalize on this impending price turbulence.
Currency Impact and Indian Refiner Margins
This geopolitical tension is already putting pressure on the Indian Rupee, which has been hovering near historic lows of 84.30 per US dollar in recent sessions. We recommend taking long positions on USD/INR call options to hedge against capital outflows if tariff negotiations sour. Additionally, monitoring the Reserve Bank of India’s foreign exchange interventions will be critical, as they have historically used their $680 billion forex reserves to defend the currency.
Traders should also target the refining margins of Indian oil majors, whose stock options are reflecting heightened risk premiums. We suggest using bear put spreads on these entities, as the modest 0.1% to 0.2% GDP savings from discounted Russian Urals have largely dried up. If Middle Eastern supplies do not normalize soon, these refiners will face squeezed margins that are not yet fully priced into the options market.
