Before the start of the Russia-Ukraine conflict in early 2022, India bought very little of Russian oil. (AI image)
With US President Donald Trump signing an executive order removing the 25% penal tariffs on India, contingent on New Delhi stopping imports of Russian crude, reports suggest that the oil procurement from Russia may come down drastically. Crude oil imports from Russia have already fallen since the Trump administration imposed sanctions on Russian oil majors Rosneft and Lukoil. Data from Kpler shows that imports were at around 1.2 million barrels per day in January, down from a peak of nearly 2 million barrels per day seen in 2024.The finalisation of the India-US trade deal is likely to result in Russian crude imports dropping by 50%, according to a Bloomberg report. According to sources quoted in the report, both state-run and private refiners – with Nayara Energy Ltd as an exception — had already stopped buying spot cargoes after Trump first referred to the trade deal in a social media post last week.
The pause in crude oil purchases is now expected to continue after the executive order issued on Friday, with imports likely to drop to roughly half of January’s average level of about 1.2 million barrels per day, the report quoted sources as saying.
What India has said about crude oil imports
On its part the Trump administration has claimed that India has committed to ending both direct and indirect imports of oil from the Russian Federation. The executive order by Trump says that the tariffs on Indian exports to the US could be increased if such crude imports resume.Before the start of the Russia-Ukraine conflict in early 2022, India bought very little of Russian oil, but it has since emerged as the largest global buyer of these supplies. Foreign Secretary Vikram Misri on Monday said that India will continue to source energy from a host of suppliers, broadening its crude basket based on requirements.
Supply Shuffle
“India’s approach on crude oil purchases has been to maintain multiple sources of supply and diversify them to ensure stability and security. The national interests will be the guiding factor for us in our choice,” he said,Meanwhile, Foreign ministry spokesperson Randhir Jaiswal said on Saturday that safeguarding the country’s energy security remains a “supreme priority,” adding that India will continue efforts to diversify its sources of energy imports.Also Read | Trump removes 25% penal tariff: What happens if India stops buying Russian crude oil?Sources quoted in the report also said Indian refiners spent the weekend closely examining the US executive order, noting that they had not yet received any instructions from the government.Nayara Energy, which has Rosneft as a major shareholder, is expected to continue purchasing roughly 400,000 barrels per day of Russian crude. This is largely because sanctions limit its ability to secure oil from other suppliers. Vandana Hari, founder of Singapore-based consultancy Vanda Insights, told Bloomberg that once the adjustment process is completed, India’s overall imports from Russia may stabilize at around 400,000 to 500,000 barrels per day. She noted that the broader economic gains from a trade agreement with the United States are likely to outweigh the financial advantages offered by discounted Russian oil.
