India Halts Russian Oil Imports: Indian state-run oil refiners have recently halted their imports of Russian crude oil, a significant shift driven by declining discounts and mounting pressure from the United States. This decision marks a notable change in India’s oil procurement strategy, especially considering the country’s status as the third-largest oil importer globally and the top buyer of seaborne Russian crude since the Ukraine conflict began. Sources familiar with the matter revealed that major state refiners such as Indian Oil Corporation, Hindustan Petroleum, Bharat Petroleum, and Mangalore Refinery Petrochemical Ltd have refrained from seeking new Russian cargoes in recent weeks. This move comes amid diminishing price advantages and increasing geopolitical risks.
These state refiners, who typically buy oil on a delivered basis, are now exploring the spot market to secure supplies from alternative sources. Their focus has shifted towards Middle Eastern grades like Abu Dhabi’s Murban crude and various West African blends. The main reason behind this redirection lies in the narrowing discounts on Russian oil, which have fallen to their lowest since 2022 due to reduced exports and stable global demand. At the same time, US President Donald Trump has intensified warnings, cautioning countries against purchasing oil from Moscow. On July 14, he threatened 100% tariffs on nations continuing to trade with Russia unless the Kremlin agreed to a substantial peace agreement in Ukraine.
Unlike their state-owned counterparts, private Indian refiners such as Reliance Industries and Nayara Energy have maintained their annual purchase contracts with Russian suppliers. These companies have strong ties with Russia’s Rosneft and continue to benefit from long-term arrangements that seem less affected by the recent price and policy fluctuations. Nevertheless, the growing disparity between public and private sector approaches in India highlights the complex dynamics in international oil trade shaped by both economic logic and geopolitical pressure.
As the discounts on Russian crude shrink, India’s incentive to import from Moscow has considerably weakened. Simultaneously, Trump’s announcement of a 25% tariff on Indian imports to the US beginning August 1 has further complicated the trade equation. Although discussions are still underway, the looming deadline for tariff implementation adds urgency to India’s re-evaluation of its import sources. These tariffs, part of Trump’s broader trade policy agenda, target several nations, with specific duties listed in alphabetical order. Countries like Brazil are set to face even higher penalties under this revised structure.
India’s pivot from Russian oil underscores a broader recalibration of its energy policy, balancing between securing cost-effective crude supplies and maintaining favorable international relations. The threat of US-imposed penalties for continued oil trade with Russia is influencing not just Indian decisions but potentially those of other global importers as well. With the US pushing hard against nations supporting Russian revenue through oil and arms purchases, the geopolitical stakes have risen sharply. While economic considerations remain critical, they are now intertwined with diplomatic strategies aimed at navigating a rapidly changing global order.