Russia’s invasion of Ukraine has triggered sweeping changes in the global energy trade. Western sanctions on Moscow have forced Russian oil exports to find new buyers, transforming energy into a platform for international political alignment. China and India have emerged as Russia’s largest energy customers, with both countries importing vast quantities of discounted Russian crude. This shift is not just economic—it is a sign of growing political cooperation among Moscow, Beijing, and New Delhi, challenging the reach of US sanctions.
At the September 2025 Shanghai Cooperation Organisation summit in Tianjin, Chinese President Xi Jinping, Russian President Vladimir Putin, and Indian Prime Minister Narendra Modi stood together in a rare public display of unity. The summit highlighted Russia’s dependence on China and India for its oil revenue. In 2024 alone, China purchased over 100 million tonnes of Russian crude, accounting for nearly one-fifth of its total oil imports. India, once a minor player in Russian oil markets, imported around US$140 billion worth of crude between 2022 and mid-2025. Together, these two Asian powers now account for most of Russia’s oil exports, providing Moscow with financial support while securing their own energy needs at favorable prices.
Political Implications and Challenges to US Influence
This emerging energy nexus is not an official alliance but rather a convergence of practical interests. Despite ongoing rivalry between China and India, both countries share a need for affordable energy and face increasing pressure from US trade policies. India has recently been hit by punitive US tariffs because of its purchases of Russian oil. China faces its own set of sanctions and tariffs over trade practices and its support for Moscow. As a result, energy trade has become an important way for these nations to assert their independence from Washington’s influence.
Western powers are watching their influence diminish as Russia, China, and India tie their energy cooperation to broader ideas about multipolarity—a world where no single power dominates. BRICS communiques and state media in China and Russia have increasingly framed these partnerships as evidence that the global order is changing. India supports some elements of this narrative while maintaining its strategic autonomy. Sanctions have linked financial systems more closely to energy trade than ever before.
Moscow is experimenting with new ways to settle payments for oil exports, such as using the Chinese yuan or even the Indian rupee instead of the US dollar. Beijing has promoted yuan-based contracts on its Shanghai exchange, giving rise to talk of a ‘petroyuan’. These financial arrangements are still largely symbolic because the dollar remains dominant in global transactions. However, they represent efforts to insulate energy trade from dollar-based sanctions and expand options for future cooperation.
Energy Security Strategies and Their Broader Impact
The Tianjin summit reinforced the perception that energy deals are now deeply political. Even without formal agreements, the optics suggested alignment among the three nations against US preferences. However, this configuration remains fragile. Russia relies heavily on China and India but retains leverage—it can adjust discounts or redirect supply if it chooses. Cheap crude helps India but increases friction with Washington; China’s dependence on sanctioned suppliers raises risks of secondary sanctions and complicates its global diplomacy.
China has responded by broadening its energy security strategy beyond just importing crude. It has signed long-term contracts with Russia, Saudi Arabia, and Iran; taken equity stakes in overseas projects; extended energy-backed loans to countries in the Global South; and expanded influence over pricing benchmarks and settlement systems. These efforts aim to build resilience across both fossil fuel supply chains and green energy sectors—insulating China from market volatility and the reach of US sanctions.
India’s relationship with discounted Russian oil began as an opportunistic move after Western sanctions redirected Moscow’s exports toward Asia in 2022. Over time, it has become a statement of strategic autonomy—even as Washington responds with punitive tariffs under President Donald Trump. Indian officials defend their actions as necessary for energy security and independence from Western pressure. For Russia, sales to Asian partners provide vital revenue but come at the cost of reduced margins and growing dependence.
Financial Multipolarity: Navigating New Settlement Systems
India has been cautious about moving away from dollar-based settlements for oil purchases. Efforts to expand rupee-based payments have faced obstacles due to Moscow’s concerns about limited uses for rupee reserves; most transactions still use dollars or UAE dirhams. In contrast, China actively promotes yuan settlement as part of a broader strategy for resilience in global energy trade. Both countries benefit from access to discounted Russian crude but approach financial multipolarity differently.
What is emerging is more than just a shift in commercial exchange—it is the transformation of oil into a political tool for building a multipolar world order. Discounted Russian crude helps meet Asia’s growing energy needs while undermining traditional Western leverage over global markets. At the same time, it pushes nations like China and India to develop alternative financial systems that could reshape international trade dynamics for years to come.
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