India’s state-owned oil refiners have begun pulling back from spot purchases of Russian crude following a fresh wave of punitive tariffs imposed by U.S. President Donald Trump. The move marks a significant shift in India’s energy procurement strategy, as geopolitical tensions mount over continued trade ties with Moscow.
According to sources with direct knowledge of procurement plans, companies such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), and Mangalore Refinery and Petrochemicals Ltd (MRPL) have paused Russian oil purchases from the spot market. These refiners, which collectively handle over 60% of India’s refining capacity, are now turning to alternative suppliers in the Middle East, Africa, and the Americas to meet their short-term needs.
The shift comes in response to Trump’s announcement of a 25% tariff on Indian exports, effective August 7, with threats of additional penalties targeting India’s energy and defense trade with Russia. The U.S. administration has accused New Delhi of “fueling the war machine” by continuing to buy discounted Russian oil, a claim India has strongly rejected as “unfair, unjustified and unreasonable”.
While private refiners such as Reliance Industries and Nayara Energy—who have long-term contracts with Russian suppliers—continue their purchases, state-run entities are exercising caution amid uncertainty over potential secondary sanctions and diplomatic fallout.
India, the world’s third-largest oil importer, has relied heavily on Russian crude since 2022, with imports peaking at over 1.75 million barrels per day earlier this year. However, narrowing discounts on Russian Urals crude and rising pressure from Western powers have weakened the economic rationale for these purchases.
Government officials have denied issuing formal instructions to halt Russian oil imports, stating that procurement decisions remain commercial. Nonetheless, the current pause by state refiners suggests a strategic recalibration in anticipation of further U.S. actions and market volatility.
As India navigates this complex geopolitical landscape, refiners are expected to increase purchases from Saudi Arabia, Iraq, Nigeria, and the United States. Analysts warn that the shift could impact refining margins and raise India’s overall oil import bill.
