India has leveraged the disruption caused by Ukraine’s intensified drone attacks on Russian oil refineries, which have significantly reduced Russia’s processing capacity and created bottlenecks in global supply.

With Russia forced to offload crude at even steeper discounts, India has sharply increased its intake, ensuring both cost savings for its refiners and strong refining spreads at a time of tight global diesel availability.

Refinery margins have surged as Indian plants run near maximum capacity, filling the supply gap left by Russian outages and concurrent Chinese refinery maintenance. This has translated into a 137% jump in Indian diesel exports, with Europe emerging as a prime buyer given its urgent need for non-Russian refined products ahead of stricter 2026 sanctions.

By positioning itself as a swing supplier, New Delhi not only captures enhanced revenues but also strengthens its geopolitical leverage within energy markets, balancing Western criticism with the realpolitik of trade flows.

However, structural challenges loom—U.S. tariffs on petroleum exports threaten margins, logistical choke points risk bottlenecks in supply chains, and a protracted conflict could recalibrate price volatility. Despite these headwinds, India’s opportunistic energy strategy underscores how tactical purchasing and refinery capacity create outsized influence in a disrupted global oil order.

If Ukraine's drone attacks on Russian oil refineries continue, India stands to reap several significant benefits:

Access To Deeply Discounted Russian Crude: Continued damage to Russian refining capacity, which is estimated at around 20% loss due to drone strikes, forces Russia to sell crude oil at a much steeper discount compared to global benchmarks like Brent. This offers Indian refiners crude at $5-$6 per barrel cheaper, creating substantial savings and improved refining margins for Indian companies.

Higher Refining Margins And Profitability: With cheaper feedstock and tight global diesel supplies caused by reductions in Russian refinery outputs, Indian refiners enjoy widened crack spreads (price difference between crude and refined fuels). Refining margins have increased by about $1.0-$1.2 per barrel, boosting overall earnings—for example, Reliance’s potential gain from this strategy is estimated at $500 million annually before tax.

Increased Export Volumes And Market Share in Europe: As Russian refined product flows shrink due to sanctions and refinery incapacitations, Europe is increasing imports from India. Diesel exports from India to Europe surged 137% recently, establishing India as a critical swing supplier to meet Europe's energy demands ahead of 2026 sanctions on Russian fuel.

Operational Advantage Over China: While Chinese refineries face seasonal maintenance and reduced throughput, Indian refineries are operating at full capacity, enabling India to process more Russian crude and expand its export volumes, further strengthening its position in the global fuel market.

Geopolitical Leverage And Strategic Autonomy: India’s ability to source cheap Russian crude while maintaining robust refining and export capacities enhances its geopolitical influence. It resists external pressures, such as U.S. tariffs and sanctions, by making sovereign energy decisions focused on affordability and reliability. This supports diplomatic relations with Russia while capitalising economically.

Long-Term Economic Gains: The annual benefits India gains from discounted Russian crude purchases could amount to around $2.5 billion, equating to a meaningful boost to national GDP and energy sector growth, helping fund further industrial and energy infrastructure development.

Challenges To Keep In Mind

The benefits depend on Russia’s refining capacity remaining limited; repair or strategic changes by Russia could reduce the discount advantage.

U.S. tariffs on Indian goods linked to Russian crude imports pose risks to export profitability.

Logistics and supply chain bottlenecks might emerge with increasing export volumes.

If Ukraine’s drone strikes on Russian refineries persist, India will continue to capitalise on competitive crude pricing, higher refining profitability, stronger export volumes especially to Europe, and reinforced geopolitical energy leverage, thereby cementing its role as a key player in the disrupted global oil landscape.

Based On TOI Report