India’s state-owned refiners have paused their purchases of Russian crude oil, according to sources familiar with the companies’ procurement plans, as the US increases pressure on New Delhi with harsh tariffs.
Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp. plan to skip spot purchases for the upcoming cycle until they receive clear government guidance, Bloomberg reported on August 7.
This will affect the buying of Russia’s Urals cargoes for October-loading, with concerns that further disruptions could arise from India’s decision.
The move comes after US President Donald Trump doubled the tariffs on all Indian exports to the US as a punishment for refiners buying Russian crude. The escalation is aimed at pressuring Moscow to end the war in Ukraine. This situation has caused fluctuations in oil futures as traders assess the potential impact on the market and Russia’s ability to find alternative buyers if Indian refiners reduce their purchases, Bloomberg claims.
Despite this, New Delhi has not officially directed refiners to stop buying Russian crude, with Prime Minister Narendra Modi’s government resisting Trump’s tariffs.
While India’s state-owned refiners are major buyers of Russian Urals crude, the pause on purchases does not necessarily mean zero purchases for October-loading. The reduced volume may prompt a shift towards other grades of oil, such as those from the US, Middle East, and Africa. Traders expect deeper Russian discounts and more offers to China, which typically does not take much of this variety, according to Bloomberg.
At its peak, India imported more than 2 million barrels a day of Russian oil, which marked a significant shift from virtually no purchases before the Russian invasion of Ukraine. The impact of this change in purchasing dynamics is still unclear, but it highlights India’s balancing act between maintaining its energy needs and avoiding further tension with the US.
Previously, it was reported that the US President Donald Trump said that additional tariffs on China could be imposed, following the example of recent 25% duties announced on India over its imports of Russian oil. “It may happen … I can’t tell you yet,” Trump told reporters, as quoted by Reuters. “We did it with India. We’re doing it probably with a couple of others. One of them could be China.”
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