Indian Oil Companies Scale Back Russian Crude Purchases After US Trade Deal
Indian oil companies, including Indian Oil, Bharat Petroleum, and Reliance Industries, have reportedly paused accepting orders for April deliveries of Russian crude oil, following an unofficial directive from the central government. The move comes after the United States lifted a 25% additional tariff on Russian oil as part of a broader trade agreement with India, a development criticized by the Communist Party of India (Marxist) as a sign of India yielding to US pressure.
Sources indicate that the decision to halt orders was communicated informally to Russian oil companies. While details remain limited, the shift suggests a potential realignment of India’s energy import strategy. Currently, existing purchase agreements for March deliveries remain in place. Nayaara Energy, a refinery with 49% ownership by Russian firm Rosneft, has also suspended orders for April, citing planned maintenance. The future of purchases beyond April remains unclear.
Several other Indian refiners, including Hindustan Petroleum, MRPL, and HMEL, had already reduced or eliminated their reliance on Russian crude prior to this recent development. In January, India imported approximately 1 million barrels of Russian oil per day, a figure expected to decrease to between 500,000 and 600,000 barrels per day in March, with roughly 400,000 barrels attributed to Nayaara Energy.
The Indian government has remained publicly cautious, avoiding direct confirmation of a commitment to halt Russian oil imports. While Commerce Minister Piyush Goyal indicated that India would prioritize its energy security, the Ministry of External Affairs has deferred comment, stating that a response would be forthcoming. This reluctance to provide a clear statement has fueled speculation about the extent of the agreement reached with the US.
The trade deal with the US, announced by President Donald Trump on Monday, includes a reduction of US tariffs on Indian goods to 18% from 50%. This tariff reduction is contingent upon India expanding imports of US products, including petroleum, defense equipment, aircraft, telecom products, and pharmaceuticals, under a multi-year framework valued at $500 billion. Trump specifically stated that India had “agreed to stop buying Russian oil,” a claim that has not been publicly confirmed by Indian officials.
Indian refining sources have indicated they have not received direct instructions from the government to cease buying Russian crude immediately, but acknowledge that existing contracts will require a phased wind-down if policy guidance changes. The situation remains fluid, with the long-term impact on India’s energy security and its relationship with Russia yet to be fully determined. The lack of official clarity from New Delhi continues to generate uncertainty within the Indian energy sector.
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