India's Growing Demand for Russian Naphtha: A Strategic Shift in Energy Trade

India and Russia's Expanding Energy Trade

India's energy trade with Russia is evolving beyond just affordable crude oil; naphtha has emerged as a significant product in this partnership. According to a report, by June 2025, India and Taiwan became the largest importers of naphtha from Russia. The reason is clear: this fuel is not only cost-effective but also crucial for various industries.

Why is Naphtha in High Demand?

Naphtha is a light hydrocarbon utilized as a raw material in the petrochemical sector. It is used to produce compounds like olefins and aromatics, which are essential for manufacturing plastics, synthetic fibers, resins, and other important chemicals. In February 2023, the European Union imposed a ban on all oil products from Russia, prompting Russia to redirect its exports towards Asia and the Middle East. Seizing this opportunity, India ramped up its naphtha purchases.

Volume of Naphtha Imported by India

Reports indicate that in June 2025, India received approximately 250,000 tons of naphtha from Russia. Although this figure represents a 5% decrease from May, a broader view of the annual data reveals that India imported over 1.4 million tons of naphtha from Russia between January and June 2025. This cargo was delivered to western ports such as Mundra, Hazira, and Sikka. Notably, India previously sourced naphtha from the UAE but has switched suppliers due to lower prices from Russia.

Rising Demand in Other Countries

India is not alone in this trend; Taiwan also significantly increased its naphtha imports from Russia in June. According to data, Taiwan received 234,000 tons of naphtha, doubling its imports from May. Between January and June 2025, Taiwan imported 1.27 million tons of naphtha from Russia. Additionally, countries like Singapore, Malaysia, Turkey, and China have also emerged as major importers of Russian naphtha during this period.

UAE Reduces Naphtha Purchases

Shipping data reveals that no naphtha arrived at the UAE's Fujairah port from Russia in June, a stark contrast to the 80,000 tons sent there in May. This decline is attributed to attacks by Houthi rebels in Yemen, which have made the Red Sea route unsafe. Consequently, traders are now routing Russian oil to Asia via the Cape of Good Hope in South Africa. In June, approximately 300,000 tons of Russian naphtha were sent to Asia via this route, compared to half that amount in May.

Strategic Implications of Naphtha Purchases

For India, acquiring naphtha from Russia is not merely a business decision; it represents a strategic maneuver. On one hand, it secures essential raw materials for the petrochemical industry, while on the other, it provides a stable and cost-effective supply amidst global price volatility.