Russia’s shift toward Asian markets has sharpened competition between China and India along both energy and geopolitical lines. As Beijing strengthens its supply security by buying more oil from Russia, it is narrowing the space available to New Delhi to access discounted Russian crude.
This situation has emerged as Moscow seeks to offset its losses in the European market with Asian demand following the Russia-Ukraine War. Western commercial and political sanctions have redirected export routes for Russian oil and natural gas, shifting the center of gravity of energy trade toward Asia.
Competition for Russian oil in Asia
China and India have become the two largest buyers of discounted Russian oil. June 2026 data show that China purchased nearly 50 percent of Russia’s crude oil exports, while India bought 36 percent. These figures highlight the weight of the two countries in Moscow’s energy revenues.
However, Beijing and New Delhi have different supply conditions. China, which shares a border with Russia and has direct pipeline links, benefits from its extensive tanker network, large energy companies and financial system, which is more resilient to sanctions pressure.
India, by contrast, brings in most Russian oil by sea. In addition to sanctions targeting tankers, rising shipping and insurance costs and problems with international payment systems are putting greater pressure on New Delhi’s supply options than on China’s.
Beijing’s energy calculus
China’s move toward Russian oil is driven by goals that include filling its strategic reserves at relatively favorable prices and diversifying supply sources in the face of a crisis in the Strait of Hormuz and risks in the Middle East. Beijing is also preparing for a possible new trade war or security crisis with the United States.
For this reason, Russian oil is more than a low-cost raw material for China. If sea routes are disrupted by war or a security crisis, oil supplied by Russia serves as a strategic safeguard for China’s energy security.
China’s declining oil purchases from Iran are also increasing the importance of Russian supply. Estimates indicate that China’s oil imports from Iran fell to as low as 340,000 barrels per day in August, while seaborne oil deliveries from Russia stood at 1.25 million barrels per day.
Russia’s production and bargaining power
Moscow’s supply capacity is not unlimited. Ukrainian attacks on Russian refineries and energy infrastructure have put pressure on the country’s oil production and processing capacity.
According to data from the International Energy Agency, Russia’s oil production fell to about 8.9 million barrels per day in 2026. With production and processing capacity under pressure, China’s increased purchases are making it harder for India to obtain low-priced Russian oil while also weakening its bargaining power vis-à-vis Moscow.
Demand from China and India is providing Russia with new room for negotiation in the short term. Moscow can use the interest of the two major Asian economies to reduce discounts on its oil sales and avoid becoming dependent on a single major customer.
On the other hand, a long-term increase in China’s share of Russia’s energy exports could deepen Moscow’s dependence on the Chinese market. As a result, the competition that benefits Russia today could eventually develop into a new dependency that increases China’s influence over Russian energy policy.
Washington’s pressure puts India in a bind
India is seeking to preserve its longstanding ties with Russia and its energy interests while continuing to pursue closer defense, trade, technology and strategic cooperation with the United States. The possibility of secondary sanctions and high tariffs over its purchases of Russian oil is narrowing New Delhi’s room for maneuver.
China, by contrast, does not have to reflect Western pressure in its foreign policy choices as directly as India does, owing to its longstanding trade war and strategic rivalry with the United States. Alongside state-owned companies, Beijing can also rely on small and independent refineries involved in buying and processing sanctioned oil.
Independent refineries in China, known as “teapots,” allow trade to continue through different companies, intermediaries, alternative currencies and tanker networks when major state-owned companies withdraw because of sanctions risks. This structure gives China greater flexibility in securing Russian oil supplies.
Beijing’s strategy combines the use of Russian energy resources with national security goals while narrowing the space for India to access the affordable energy its industry needs. As a result, energy trade has become an important tool not only for economic interests but also for China-India competition and the balancing policy between Moscow and New Delhi.
