Indian refiners face challenge as Trump says country won't buy Russian oil

Along with price discounts, India must replace around 1.7 million barrels per day of average Russian crude imports

India will lose access to lucrative discounts, and its refiners will need to work much harder to replace crude oil from Russia, the country’s biggest supplier, after it agreed on a trade pact with the United States and according to President Donald Trump committed to stop purchasing Russian oil.

 

Discounts on Russian oil supplies had surged sixfold to more than $10 per barrel, calculated off Dated Brent crude oil on a delivered basis, from mid-2025 after Washington unleashed the strictest sanctions on Russia oil producers in November, two senior traders from state oil companies told Business Standard.

 

Along with price discounts, India must replace around 1.7 million barrels per day (bpd) of average Russian crude imports, which were easily made available for India every month since mid-2022 by Middle East-based Russian trading firms, the official said.

 

The US and India on Monday reached an initial trade agreement reducing tariffs on each other’s goods. Trump said that India had agreed to stop buying Russian oil and purchase more energy from the US and potentially Venezuelan oil. Prime Minister Narendra Modi made no mention of Russian oil in his congratulatory tweet to Trump.

 

Senior refining officials told Business Standard that there are no instructions from New Delhi on Russian oil purchases though Indian Oil, Bharat Petroleum and other refiners have kept the Oil Ministry informed about the order status for Russian oil.

 

Oil Minister Hardeep Singh Puri told IEW attendees in Goa last month that India has increased the number of supplier countries from 27 to 41 to improve energy security. Some of the key grades to replace Russian oil include UAE’s Murban, Omani oil, Iraqi Basrah, US and Latin American flows, refining officials said.

 

An understanding over the bilateral trade pact may help US crude oil supplies to India rebound later this year. Shipments last month slumped to the lowest since October at 297,000 bpd as Indian refiners weighed options amid fraying ties, senior refining officials said. US loadings in December and January averaged even lower at 180,000 bpd, which will reach India this month and next.

 

Given Russia’s oversized role in India’s oil supplies, no single nation can be a replacement, refining officials said. Replacing over a third of India’s oil imports at competitive rates is going to be a challenge, said traders from state refiners, even though some progress was made in the last two months

 

India’s overall imports of crude oil in January at 5.24 million bpd were the second highest ever, after a record 5.26 million bpd in March 2025, but Russian oil supplies dropped to just 23 per cent of total imports by volumes, according to latest data from market intelligence agency Kpler. The ratio was 37 percent in November, orders for which are typically placed in late September.

 

Alternate crude oils

 

Going by the increasing influence of Latin American and West African barrels in near record January import volumes, Indian refiners have made some progress, ship-tracking data showed.

 

Brazilian oil supplies, which can replace Russian medium density, higher sulphur crude in Indian refineries after blending with heavier grades, made an impact, with December shipments at a record 246,000 bpd and January coming a bit lower at 221,000 bpd, doubling from a year earlier. October purchases were around 196,000 bpd, ship-tracking data accessed by ‘Business Standard’ showed.

 

Indian Oil and Reliance Industries, the country’s two biggest refiners, lead purchases, Kpler data showed. But Bharat Petroleum has also found an appetite for Brazilian barrels, importing 4 out of the 6 million barrels it signed up at IEW 2025 in February 2025 under an annual supply contract. In the calendar year 2026, Bharat Petroleum has contracted for up to 12 million barrels of Brazilian oil, a company official said, as the light, low sulphur varieties on offer provide value in their facilities.

 

Brazil shipped a record 289,000 bpd to India in January 2026— accounting for more than 5 per cent of Indian imports — which takes around 45 days or more to reach Jamnagar and other Indian ports, according to industry officials and shipping data.

 

Colombia crude oil supplies averaged 129,000 bpd, the highest in the last two years and four times higher from a year earlier, accounting for a 2.5 percent share of imports, Kpler data showed. Reliance was the buyer.

 

January purchases of Nigerian and Angolan crude oil, typically light, sweet varieties, at a combined 397,000 bpd were the highest since April 2025, Kpler data showed.