When India turned its back, Russia became kind to China, offering crude oil at the price of water!
Following the trade deal with the US, India has reduced its purchases of Russian oil, benefiting China. To compensate for the losses, Russia has begun supplying China with oil at a steep discount. China is now buying oil at record low prices, while India's imports have fallen significantly.
Russian oil, once the preferred choice for Indian refineries, has now shifted its routes. The recent trade deal between India and the United States has created difficulties for Russia, a direct benefit of which neighboring China is now reaping.
Due to US pressure and the condition of tariff exemptions, India has reduced its purchases of Russian oil, prompting Russia to open its coffers to its old friend, China.
China is in trouble
At the heart of this entire matter is a major trade agreement between India and the United States. The US has reduced tariffs on goods imported from India, but this comes with a significant condition.
Washington has made it clear that this exemption will only be granted if Delhi stops or significantly reduces its purchase of crude oil from Russia.
Under the agreement, India is now forced to turn to countries like the United States and Venezuela for its energy needs. Its impact is already visible on the ground.
Indian refineries, once filled with cheap Russian oil, are now empty. India's withdrawal necessitated the search for new buyers for Russia's accumulating oil reserves, and China has emerged as a major facilitator.
Moscow gave Dragon a huge discount
To compensate for the losses incurred by India's indifference, Russia has spared no effort to woo China. Reuters reports that Russia has drastically reduced oil prices for China. The situation is such that if India withdraws completely, China will be the only major buyer of Russian oil.
This is a critical time for Russia, which is grappling with Western sanctions. Its oil is piling up in ships, and there's a need to sell it. In desperation, Russia has increased discounts on oil exports to China.
This week, discounts on Russian "ESPO Blend" oil shipped to China have risen to nearly $9 per barrel, up from $7-8 previously. Meanwhile, "Urals" grade oil, which often ships to India, is now receiving discounts of around $12 per barrel.
Dragon is making record-breaking purchases
China has made a splash in the flood of cheap oil. Statistics show that January 2026 was the largest month in the history of oil trade between Russia and China.
According to Kpler data, China imported a record 1.7 million barrels of oil per day from Russia by sea in January. Other reports put the figure at 18.6 million barrels per day, shattering all previous year's records.
China's independent refiners are seizing this opportunity. They are not only increasing their profits by purchasing this oil at a steep discount, but also strengthening their strategic reserves. The situation is such that Chinese companies have even reduced their purchases from Iran in exchange for cheap Russian oil.
Are the doors closed for India?
Now the question arises: will India stop buying Russian oil altogether? Analysts at JPMorgan believe this is unlikely.
They estimate that despite US pressure, India will continue to buy approximately 800,000 to 100,000 barrels of Russian crude oil per day. This amount would represent approximately 17 to 21% of India's total oil imports.
However, this figure is significantly lower than in June last year, when India was buying 2 million barrels of oil per day. In January, this figure fell to 1.1 million barrels, the lowest level since November 2022.