Saudi Arabia, Iraq, and Kuwait allocated full term crude volumes to Indian refiners for December 2025, marking a significant Middle East oil supply boost to India. This move comes as India refiners’ Middle East oil imports rise in response to tightening US sanctions on Russian producers. The allocations, confirmed on Tuesday, November 11, 2025, ensure stable supplies for key refineries.
This Middle East oil supply boost to India bolsters energy security across South Asia, where rising fuel demand drives economic growth. By diversifying away from sanctioned Russian crude, India shields its refineries from disruptions, stabilises domestic fuel prices, and supports industrial output in neighbouring nations reliant on shared pipelines and trade routes.
Saudi Iraq Kuwait Crude Allocation to India Meets Full Requests
Indian refiners secured complete crude allocations from Saudi Arabia and Iraq, the largest OPEC producers, for December deliveries. Sources close to the matter revealed that Saudi Aramco and Iraq’s State Oil Marketing Organisation (SOMO) granted 100 per cent of requested volumes. At least one major refiner will receive higher monthly supplies from Iraq than in November, while Saudi Aramco increased volumes to another client.
Kuwait Petroleum Corporation (KPC) also ramped up shipments, offering additional crude to Indian buyers in both November and December. This Saudi Iraq Kuwait crude allocation to India aligns with lower official selling prices set by Aramco and SOMO, making Middle Eastern grades more competitive. Refiners snapped up spot market cargoes from the region following price adjustments.
The full allocations come amid global oil market volatility. OPEC+ producers, including these nations, aim to reclaim market share in India, the world’s third-largest oil importer. Indian refiners, facing uncertainty over Russian supplies, prioritised term contracts to lock in volumes early.
India Refiners Middle East Oil Imports Rise Amid Diversification Push
India’s crude oil imports from the Middle East surged in recent months, with refiners turning to reliable suppliers. Government data shows total crude imports rose 6.1 per cent in September 2025 compared to the previous year, reaching approximately 20.4 million tonnes for the April-September period of fiscal year 2025-26. This uptick reflects a broader India refiners Middle East oil imports rise, driven by strategic shifts.
Historically, Saudi Arabia supplied 33.35 million metric tonnes of crude to India in fiscal year 2023-24, accounting for 14.3 per cent of total imports. Iraq and the UAE followed as key Middle Eastern sources, though their shares dipped slightly as Russian volumes peaked at 35.9 per cent in the same period. Kuwait’s contributions, while smaller, have grown through spot and term deals.
In September 2025, top import origins included Russia, Iraq, Saudi Arabia, UAE, and the US, collectively covering over 82 per cent of inflows. The Middle East’s share stabilised around 40 per cent, up from earlier lows, as refiners like Indian Oil Corporation and Bharat Petroleum expanded processing capacities for heavier grades from the Gulf.
This India refiners Middle East oil imports rise supports domestic refining utilisation rates, which hovered near 90 per cent in the first half of 2025. Enhanced supplies ensure steady production of diesel and petrol, critical for India’s transport sector and agricultural economy. South Asian neighbours, including Bangladesh and Sri Lanka, benefit indirectly through lower regional fuel costs and shared refining outputs.
US Sanctions Drive Middle East Oil to India in Strategic Pivot
Tightening Western sanctions propelled the US sanctions drive Middle East oil to India, prompting refiners to pause Russian purchases. Last month, the US, UK, and EU targeted Russian giants Rosneft and Lukoil, designating their oil as sanctioned entities. These measures triggered immediate trade halts, with Indian buyers in New Delhi rerouting to alternative sources.
The sanctions fears eroded confidence in Russian Urals crude, once favoured for its discount pricing. Indian refiners, processing over 5 million barrels per day, sought immediate replacements via spot tenders. Middle Eastern producers filled the gap, offering excess capacity from underutilised fields.
This US sanctions drive Middle East oil to India accelerated a diversification trend underway since 2022. Russia’s share, which ballooned post-Ukraine conflict, now faces caps under G7 price mechanisms. In contrast, Saudi Arabia’s Arab Light and Iraq’s Basrah Medium grades offer quality matches for Indian complexes, with shorter shipping routes reducing costs.
Economists note the shift could add USD 2-3 billion to India’s import bill annually if Russian discounts vanish, but it mitigates geopolitical risks. For South Asia, stable Gulf supplies prevent spillover shortages, as seen in 2022’s regional fuel crises.
Background of Middle East Oil Supply
India’s oil import dependence stands at 85 per cent, with annual crude needs exceeding 230 million tonnes. Middle Eastern suppliers have long dominated, providing grades suited to state-run refineries in Gujarat and Andhra Pradesh. The recent Saudi Iraq Kuwait crude allocation to India builds on bilateral pacts, including a 2023 framework for 500,000 barrels per day from Aramco to Reliance Industries.
Past disruptions, like the 2019 Abqaiq attack, underscored the need for multi-source strategies. Today’s moves reflect matured ties, with Indian firms investing USD 10 billion in Gulf upstream projects.
What’s Next
Refiners eye January 2026 contracts, potentially extending the Middle East oil supply boost to India if sanctions persist. OPEC+ output decisions in December could further influence pricing, while New Delhi monitors shadow fleet risks in Russian trade. Long-term, green hydrogen pilots may ease import pressures, but fossil fuels remain core through 2030.
The Middle East oil supply boost to India cements Gulf producers’ foothold, ensuring resilient energy flows for South Asia’s growth engine amid global realignments.
Published in SouthAsianDesk, November 12th, 2025
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