Trump tariff: Russian oil imports may dip in Aug while US' share rises

Sanctions and secondary tariffs by the United States (US) and European Union have, by now, made it clear that India may receive very little Russian oil in September. But new data, accessed by Business Standard, and sources suggest that a third of the contracted August deliveries of Russian oil — around 10 per cent of India’s overall crude imports for the month — are equally at risk.

 

Over half of the 40 ships carrying Russian oil to India for deliveries this month are uncertain about discharging their cargoes because they will reach India only after August 21, just six days before US President Donald Trump’s secondary tariffs kick in, exclusive ship tracking data shows and industry sources said. Around half of them are headed to Sikka or Vadinar ports, used by Reliance Industries and Russian Rosneft-run Nayara Energy.

 

Trump’s tariffs threaten to erode the share of Russian oil to less than a fifth of total Indian crude imports in August, an over 3-year low, from 45 per cent in June and 34 per cent in July. Meanwhile, the share of US oil in India’s crude import basket doubled to 8 per cent in April and May, from 4 per cent in FY25, US investment bank Goldman Sachs said in a note on August 7, estimating the total effective US tariff on Indian imports at around 32pp after all exemptions. 

 At risk is about 16 million barrels of Russian crude oil, loaded in 20 tankers and scheduled to discharge in India between August 22 and 31, according to data from maritime intelligence agency Kpler. India imported 63 million barrels of Russian oil in June and 50 million barrels in July. Typically, refiners may stop accepting crude oil a few days prior to the US sanctions date to be safe, industry officials said. 

“Refiners will be lifting all committed volumes unless sanction issues from the US government plays in,” a top refining official said. 

President Trump, through a White House executive order, levied additional 25 per cent “ad valorem” duty on Indian goods imports, effective August 27, owing to India’s continued energy purchases from Russia, which will take the total tariff levy on Indian imports to 50 per cent. 

“Russian cargoes contracted in the last trading cycle would be delivered as late as September or early October. But deals done in past will spill over the deadline of August for sure,” another official from a state refiner said. “Technically speaking, nothing has changed with respect to Russian cargoes and refiners may continue to take delivery post the mentioned deadline.” 

New Delhi has neither told oil companies to halt nor continue the purchase of Russian oil, state-run refiner Hindustan Petroleum’s Chairman Vikas Kaushal said in an investor call last week. The government has given freedom to state oil companies to source oil based on economic considerations, he added. 

The stoppage of Russian oil flows will not have any “significant” impact, he said. His company imported a meagre 24,000 barrels per day in July, slashing purchases by over a tenth from a year earlier, but other refiners like Reliance Industries, Nayara Energy and Indian Oil are much more exposed to Russian oil flows, shipping data shows. 

August receipts 

India may receive only around 1 million barrels per day of oil from Russia this month, half of June's flows and a third lower from July, if Trump’s tariffs stop receipt of cargoes after the 22nd, ship data showed.

 

 Indian refiners are confused whether to receive the cargoes and plunge the country into a tariff crisis in the absence of a directive from Delhi, two refining sources said. They expect Delhi to find a solution. 

The stoppage of flows will also result in a shortfall in August deliveries of contracted Russian oil, leaving Indian refiners to scramble to arrange alternate cargoes from elsewhere to make up for the gap, paying a premium in the process, sources said.

 

The Middle East would be the only option at short notice for extra cargoes, an industry official said. 

India may receive only around 34 million barrels this month of Russian crude oil, contracted by Indian refiners in June/July prior to America’s secondary tariff announcement this month, according to calculations based on ship tracking data. 

That includes 19 million barrels of crude delivered between August 1 and 9 and another 15 million barrels or so of oil that is expected to land between August 16 and 21, Kpler data shows.