Russian crude oil import largely stable despite US tariff announcement

Cargoes of crude oil for September delivery in India down 45% in August compared to July

India’s import of Russian crude oil was broadly stable in the first 18 days of August despite the Trump administration’s tariff announcement in late July.

 

However, this apparent resilience largely reflects timing as most of the August cargoes were contracted in June and early July, before the policy shift, experts say.

 

Any material impact on trade flows, whether due to tariffs, payment logistics, or shipping challenges, is more likely to emerge from late September. The data shows Russian cargoes of crude oil headed for September delivery in India are down 45 per cent in August as compared to July.

 

“There has been no directive from the Indian government to reduce Russian oil purchases, and refiners continue to operate under a business-as-usual approach. That said, there is a growing interest among Indian refiners to diversify supply, with increased engagement in sourcing barrels from the US, West Africa, and Latin America — not as a move away from Russian crude oil but as a prudent step toward enhancing energy security and mitigating potential risks,” said Sumit Ritolia, lead research analyst (refining, supply and modelling), ship-tracking analytics firm Kpler.   

 

The interest among Indian refiners reflects a strategic shift from purely margin-driven buying to a more balanced approach that considers logistical and geopolitical uncertainties, he added.

 

Indian refiners still rely on non-Russian sources for 60-65 per cent of their crude oil needs and the diversification efforts should be seen as building flexibility rather than signalling a structural change in supply preference, experts say.

 

“The broad sense from the industry is that refiners are monitoring developments and showing a growing interest in US, West African, and Latin American barrels — not as replacements, but as hedges against possible disruption. This marks a subtle but notable shift: From pure margin maximisation to energy security and logistical risk management,” Ritolia said.  Until there is a clear policy shift or sustained change in trade economics, Russian flows remain a core part of India’s crude oil basket.

 

With less than two weeks remaining in the month, it is too early to draw conclusions but vessel signalling in the coming days, especially as ships pass through the Suez Canal and Red Sea, will provide greater clarity on final destinations. The threat of imposing secondary tariffs —up to 500 per cent — on buyers of Russian crude oil, particularly targeting China and India, has been one of the more dramatic policy proposals in recent months, said Anish De, global head (energy, natural resources, and chemicals), KPMG International.

 

“While the proposal signals a bold geopolitical stance, its implementation would carry significant risks. Severing trade with major economies could trigger market shocks and drive oil prices sharply upward,” he said.