Indian refiners seek policy clarity after US signals halt to Russian oil purchases

Indian refiners are looking for direction from the government on future purchases of Russian crude after US President Donald Trump said that New Delhi would halt sourcing oil from Russia as part of efforts to secure lower US trade tariffs, Bloomberg reported.

The announcement followed a call between Trump and Indian Prime Minister Narendra Modi, although an official statement from the Indian side confirming broader trade understandings did not specifically talk about oil imports.

India has already cut purchases of Russian crude in recent months, particularly after sanctions targeted major Russian energy producers. However, refiners have continued buying discounted Russian supplies, which remain economically attractive compared with other sources, Bloomberg said.

According to people familiar with the matter, at least three Indian refiners have asked for clarification from New Delhi regarding procurement plans, while two refiners have temporarily halted purchases amid uncertainty over policy direction.

India became one of the largest buyers of Russian oil after the 2022 invasion of Ukraine, with imports hitting more than 2mn barrels per day. Shipments have since moderated, dropping to about 1.2mn barrels per day in January, according to tanker-tracking data.

Industry estimates suggest imports could decline further to between 800,000 and 1mn barrels per day in coming months, a level viewed as manageable for Indian refiners while aligning with US expectations, Bloomberg added. Around half of those supplies are estimated to be processed by Nayara Energy, partly owned by sanctioned Russian producer Rosneft, with the remainder distributed among other refiners.

During periods of intense US pressure last year, some refiners had expected Russian imports to drop close to zero, but flows continued due to favourable pricing and supply considerations.