State-owned oil refiners in India temporarily halt purchases of Russian crude oil following Trump's warning
In a recent development, Indian state refiners have temporarily halted the purchase of Russian oil, primarily due to commercial reasons related to narrowing discounts on Russian crude. This shift in buying patterns is not a direct result of a government directive or geopolitical pressure [1][2].
The pause in Russian oil purchases by Indian state refiners, such as Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp, and Mangalore Refinery Petrochemical Ltd, has been ongoing for the past week [2]. However, private refiners like Reliance Industries and Nayara Energy, majority-owned by Russian entities, continue to purchase Russian oil.
The decision by Indian state refiners to pause Russian oil purchases is market-driven, with US crude oil emerging as a key alternative source to fill some of the gap left by reduced Russian purchases [1]. The imports of US crude oil have significantly increased, rising more than 50% from January to June 2025 compared to the previous year [1].
Meanwhile, the US President, Donald Trump, has threatened 100% tariffs on countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine [3]. However, India has not been explicitly mentioned in this threat.
India has reiterated its opposition to "unilateral sanctions" [4]. This stance is shared by the refiners, who fear that the latest EU curbs could complicate overseas trade, including fundraising, even for buyers adhering to the price cap [5].
In a separate development, President Trump announced a 25% tariff on goods imported from India, effective from August 1 [6]. India has also expressed its opposition to these tariffs.
Russia remains the top supplier to India, responsible for about 35% of India's overall oil supplies [7]. The four refiners have turned to spot markets for replacement supply, mostly sourcing from Middle Eastern grades such as Abu Dhabi's Murban crude and West African oil [4].
As negotiations regarding the tariffs continue, the oil market will continue to monitor the situation closely to understand its potential impact on global oil prices and trade patterns.
- Despite the halt in purchases by Indian state refiners, private refiners like Reliance Industries and Nayara Energy, which are majority-owned by Russian entities, are still buying Russian oil.
- The US President, Donald Trump, has threatened 100% tariffs on countries buying Russian oil, but India has not been explicitly mentioned in this threat.
- The Indian state refiners' decision to pause Russian oil purchases has been market-driven, with an increase in US crude oil imports serving as a key alternative source.
- India, along with the refiners, fears that the latest EU curbs could complicate overseas trade, including fundraising, even for buyers adhering to the price cap.
- In the general news, the world energy industry is closely monitoring the potential impact of ongoing tariff negotiations on global oil prices and trade patterns, with Russia remaining the top supplier to India.
