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India's Balancing Act Deepens as Russian Tanker Standoff Off Odisha Tests Energy Ties With Moscow

19 Sept 2026

Created by

The BV Team

But a small but telling test of how far New Delhi is willing to go to protect a relationship which is now the foundation of almost a third of its oil requirements has been quietly set out in the middle of the sea off the coast of Odisha in a commercial dispute. The Ministry of External Affairs said on Friday it continues to have regular contact with the Russian Embassy regarding the fate of the crew of the oil tanker, Unity, which is anchored about 10 km off the Paradip Port where the seafarers are effectively marooned at sea for months.


Spokesperson Randhir Jaiswal was careful not to intimate the episode was a diplomatic issue and not a judicial one. The detention of the vessel, he said, came on the orders of Odisha High Court and the involvement of the New Delhi government had been limited only to ensuring welfare of those onboard, and their eventual repatriation. That distinction matters. It would enable the government to demonstrate its humanitarian concern while not providing an excuse for its critics to allege that the government is meddling in a domestic legal case or giving a chance for the Kremlin to bend commercial law to its will.


The reality of the case is not as neat as the ministry's carefully-constructed statement would imply. The Unity, carrying a Cameroon flag, was arrested in May after a dispute erupted over non-payment of bunker fuel dues by the ship, which had been caused by a claim by a fuel supplier. The court order had grounded it indefinitely, as it was en route to Paradip to unload Russian crude into Indian Oil Corp. The disagreement started as a mundane business one, but has since evolved into more of a labour issue.


The ILO has already entered the Unity into its joint database with the IMO, indicating that the vessel had been abandoned by its crew who were not paid their wages and who were stranded far beyond the end of their contracts. In a communication as early as mid-July, the Russian Consulate General in Kolkata pointed out contracts that had lapsed and outstanding wages. The consulate's estimate of the crew is 20 Russian nationals, one Kazakh citizen and the remainder.


There's a bigger picture here and it has little to do with one leaking tanker. Russia's share of India's crude imports fell to negligible levels, around two-tenths of a per cent of India's imports, from the time of the invasion of Ukraine in February 2022 but has since shot to become its biggest supplier, sometimes exceeding a third of total oil imports. The change came from cheaper barrels and what Western governments and researchers have dubbed the shadow fleet: the ageing tankers, a large number of which have been reflagged, insured in markets outside the G7 countries, and sometimes with a deliberately obscure ownership structure to avoid the price cap imposed by Washington and its allies on Russian crude.


In the first nine months alone last year, India received more than five million tonnes of Russian crude, which was shipped under false flags, worth in the neighbourhood of two billion euros, according to Helsinki watchdog Centre for Research on Energy and Clean Air. This summer, the think tank's research revealed Indian crude imports from Russia rising to unprecedented monthly levels, despite the slide in Moscow's overall oil revenue due to falling oil prices on the international market, an indication that the discount arbitrage India is running has, if anything, worsened.


There is a cost of that arbitrage which doesn't often appear in refining margins. Further measures such as blacklisting tanker operators, insurers or producers like Gazprom Neft and Surgutneftegaz have left Indian refiners with a new phase of uncertainty: cargoes diverted, freight rates climbing and ships languishing off Sri Lanka as owners and buyers debate whether a cargo is still legally deliverable. The Unity's dilemma is a smaller, human-size version of the same structural fragility. A ship whose legal owner has been unable to pay twenty-odd crew members based on the ship's official records, is caught in a court battle between India and an importer.


New Delhi's initial response has been measured and not overreaching. There is no sign the government is looking to intervene in the Odisha High Court proceedings and authorities have been careful to ensure the repatriation issue is separate from the underlying business dispute. It's a fair judgment to make that restraint. India has developed a true strategic need to keep the Russian barrels coming at a discount, which has helped the exchequer save billions in import costs and controlled domestic inflation when international crude prices have been fluctuating.


However, that interest does not mean the state incurs a legal and reputational liability regarding a shipping platform designed with the deliberate intention of circumventing sanctions enforcement. The more the Indian government relies on the usage of tankers of obscure ownership and dubious insurance to maintain the discount, the more often it will happen and the more often the question will be asked: is it worth saving on the price of crude if the ship, cargo or crew gets stuck in Indian waters with no clear avenue of recourse?


In the meantime the situation of repatriation would depend on whether Moscow's consulate, the ship's companies and Indian maritime officials manage to resolve the wage arrears and arrange the way back. It is not the oil that is being tested here, it is the well-being of the crew and the credibility of India's marine labour monitoring system. What happens here may be more indicative of the strength of the India-Russia energy partnership than a pipeline of numbers on barrels per day.



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