India cuts Russian crude oil buys for December amid Trump tariffs

India's reduced Russian oil orders come after the US raised tariffs on Indian imports to 50% and imposed sanctions on Russian oil giants Rosneft and Lukoil

India has reduced its purchases of Russian crude oil for December deliveries, reflecting the growing impact of Western sanctions and ongoing trade negotiations with the United States, Bloomberg reported.

 

Five of India’s major refiners have not placed any orders for Russian crude for next month. Usually, these deals are finalised by the 10th of each month. The decision marks a significant change for the world’s third-largest oil importer, which has relied heavily on discounted Russian oil in recent years.

 

US tariffs, sanctions shift buying patterns

 

The slowdown in Russian oil orders follows a series of US measures that have reshaped global trade flows. In August, US President Donald Trump raised tariffs on all Indian imports to 50 per cent and in October, his administration imposed sanctions on Russia’s two largest oil producers, Rosneft PJSC and Lukoil PJSC.

 

 

These actions have increased scrutiny of India’s energy trade, with Washington accusing New Delhi of indirectly financing Russia’s war in Ukraine through its purchases of Russian oil.     

 

Major refiners hold back

 

The refiners holding back orders, including Reliance Industries Ltd, Bharat Petroleum Corp. Ltd, Hindustan Petroleum Corp. Ltd, Mangalore Refinery and Petrochemicals Ltd and HPCL-Mittal Energy Ltd, together account for nearly two-thirds of India’s Russian crude imports so far this year, according to Kpler data.

 

Their caution also aligns with ongoing trade discussions between India and the US. Trump said earlier this week that the two nations were “pretty close” to finalising a deal. As part of those talks, India has reportedly agreed to increase its crude purchases from the US.

 

Only two buyers remain active

 

At present, only Indian Oil Corp. (IOC) and Nayara Energy Ltd have secured Russian crude for December. IOC has been buying from non-sanctioned suppliers, while Nayara, which is partially owned by Rosneft, continues to depend entirely on Russian shipments.

 

Traders are offering Russian crude from non-sanctioned sellers at discounts of $3 to $4 per barrel. However, Indian refiners remain cautious due to complex due-diligence requirements meant to ensure that sanctioned entities are not involved in the supply chain, Bloomberg reported.

 

Turning to other sources

 

Russia has supplied around 36 per cent of India’s crude imports this year, but refiners are already looking for alternatives as a global oil surplus is expected soon.

 

IOC recently invited bids to buy up to 24 million barrels from the Americas for delivery between January and March, while Hindustan Petroleum purchased 4 million barrels of US and West Asian grades for January.

 

In addition, Indian state-owned refiners have approached traditional suppliers in the Persian Gulf. Executives from Saudi Aramco and Abu Dhabi National Oil Co. (ADNOC) met Indian officials last week on the sidelines of an energy conference in Abu Dhabi, where they assured continued supplies, Bloomberg reported.     

Trump says India has cut Russian oil imports

 

US President Donald Trump on Monday reiterated his claim that India has largely stopped importing oil from Russia and indicated that the United States may soon lower tariffs on Indian goods.

 

When asked about progress on a trade deal with India and the possibility of reducing tariffs, Trump said, “Well, right now, the tariffs are very high on India because of the Russian oil, and they've stopped doing the Russian oil. It's been reduced very substantially. Yeah, we're going to be bringing the tariffs down... At some point, we're going to be bringing them down...”

 

In recent weeks, Trump has repeatedly said that Prime Minister Narendra Modi has promised to scale back crude purchases from Russia. He has also sounded positive about the ongoing trade discussions between the two countries.

 

Last week, Trump said, “They (trade talks with India) are going good, he stopped buying oil from Russia largely. He is a friend of mine, and we speak and he wants me to go there. We will figure that out, I will go...”