Indian purchases of Russian crude in defiance of Western pressure over the Ukraine war have fallen to an 11-month low as the price tag on the discounted oil rises, figures show.

Since the invasion of Ukraine nearly two years ago, India has bought hundreds of millions of barrels of cut-price Russian crude, saving itself billions of dollars while bolstering Moscow’s war coffers.

The purchases have catapulted it to second place among Russia’s customers behind China, and Indian officials have made no secret of their decision to prioritize national interest over international sanctions against Moscow.

But the price of Russian crude has risen in the face of Organization of Petroleum Exporting Countries Plus production cuts and increased demand from China, analysts say, making it less attractive to Indian customers.

Indian refiners bought 1.45 million barrels per day of Russian oil last month, their lowest amount since last January and down nearly 16 percent from November, according to global energy trade intelligence platform Kpler.

The “interplay between India and China” was a key driver of the change, Viktor Katona, lead crude analyst at Kpler told Agence France-Presse, “as both countries now vie for the same barrels.”

The biggest beneficiary of the change is Moscow: Russian crude has been trading above $85 per barrel, reports say, even though a coalition of the Group of 7, European Union and Australia imposed a $60 price cap a year ago.

New Delhi’s reduced imports will be welcomed by some European policymakers who have raised concerns over how Indian refiners have processed Russian crude into fuel for the European market, effectively bypassing the EU’s sanctions.

Changing course

Indian refineries paid an average $85.90 a barrel for Russian crude in November, according to a Bloomberg analysis of government data, just above the $85.70 offered by Iraq, and over $25 higher than the G7’s price cap.

Moscow is itself looking to shore up its oil revenues.

In May, Russian Finance Minister Anton Siluanov blamed “all these discounts” for a 50 percent fall in its energy revenues.

Yale professor Jeffrey Sonnenfeld, who has advised the United States Treasury on the price caps, told AFP there had been some “reduction in the efficacy of the price cap,” but said it was still driving up Moscow’s shipping and insurance costs.

Indian officials admit there have been logistical challenges.

New Delhi and other customers of Russian oil prefer to avoid paying for it in US dollars as doing so could open them to secondary sanctions.

Last month, state-run Indian Oil Corporation agreed to buy Sokol-grade oil from the Russian Pacific island of Sakhalin in United Arab Emirates dirhams, an Indian government official told AFP.

But the deal ultimately did not go through because the Russian oil supplier was unable to open a UAE bank account to accept the currency, he said.

The shipment changed destination on the high seas and now appears to be en route to a Chinese refiner, according to an assessment by energy trade platform Vortexa.