Indian refiners to trim Russian oil purchases as higher US levies loom

By Rakesh Sharma and Yongchang Chin

 

Refiners in India, among the largest buyers of Russian crude, are planning to trim their purchases in the coming weeks, a modest concession to Washington’s hawks less than a day ahead of a hike in US tariffs, but also a signal that the country has no plans to sever ties with Moscow.  

State-run and private processors, including heavyweight Reliance Industries Ltd., are expected to buy 1.4 million-to-1.6 million barrels a day for October loading and beyond, said people with knowledge of the matter who asked not to be identified because they’re not authorized to speak publicly. 

 

That compares with an average of 1.8 million barrels a day in the first half of the year. 

 

The Trump administration, eager to reduce a trade deficit with India, has amped up pressure on the country’s energy trade with Russia. That includes a doubling of US tariffs, due to take effect on Wednesday. 

 

Volumes may change if India reaches a trade deal with Trump and US eases pressure on India for funding Russia’s war with Ukraine, the people said.

 

Spokespeople for India’s oil ministry, Reliance, Nayara Energy Ltd., and state-run refiners Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. didn’t immediately respond to emails seeking comment.

 

Since late last month, under pressure to secure a trade deal and progress in Ukraine, President Donald Trump has singled out India for criticism over purchases of Russian crude, and particularly the dramatic increase since the start of the war in Ukraine. From minimal purchases before 2022, the country now accounts for 37 per cent of Moscow’s oil exports, according to Kasatkin Consulting.

 

US administration officials have since dialed up the volume with their own public criticism, homing in on the country’s energy tycoons.

 

The US Department of Homeland Security issued a draft notice on Monday to double tariffs on Indian imports to 50 per cent on Aug. 27.