India’s state-owned oil refiners have stopped buying Russian crude for now, a Bloomberg report said citing people familiar with the matter. The decision has been reportedly taken after Trump announced on Wednesday that he is imposing new 25% tariff on Indian imports, blaming India’s continued purchase of oil from Russia. This is in addition to a similar 25% tariff announced last week, taking the tally to 50%. The new measures will take effect in about 20 days, leaving room for last-minute negotiations.
According to the report, Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum have decided not to buy Russian oil from the open market for now. The companies are waiting for clear instructions from the Indian government before making further deals.
New Delhi weighing options on offering trade concessions on agri and dairy products
Another Bloomberg report citing sources familiar with the issue, suggests that the officials in New Delhi are exploring their options on what trade concessions they can offer to the US after Donald Trump announced a 50% tariff on Indian goods.
As it plans its next steps, India is looking at the possibility of a trade agreement with the US. Officials are reviewing if limited trade relaxations, especially in agriculture and dairy, can be offered in a way that meets US expectations but does not harm local farmers.
One idea being considered is allowing restricted imports of genetically modified corn, but only for industrial or animal use and with strict tracking measures, Bloomberg reported a source saying.
Since the additional tariffs come into effect on August 27, India sees this period as a chance to continue talks with the Trump administration. But as for now, the Indian government is not planning to respond with similar trade restrictions.
As per the sources cited by Bloomberg, Indian officials are aiming to use diplomatic and trade channels to resolve the issue, hoping to reach a deal that protects the country’s independence in decision-making.
Pause may impact orders for October-loading of Urals cargoes, a key Russian oil grade
The report further state that the oil deals outside of long-term contracts usually follow short buying cycles. Oil producers and refiners often book shipments about 1.5 to 2 months before they’re due to load. This helps ensure a steady supply of oil to meet demand.
With Indian refiners now pausing fresh spot purchases of Russian oil, this move is expected to affect orders for October-loading of Urals cargoes, a key Russian oil grade. While it’s unlikely that Indian companies will stop buying Urals oil completely, traders say there could be a drop. If that happens, refiners may look to the US, Middle East, or Africa to fill the gap, the report added.
Talks for October shipments haven’t started yet, but traders believe Russia may offer bigger discounts or send more cargoes to China, which normally doesn’t buy much Urals crude.
The report said that Indian refiners bought fewer September-loading Urals cargoes in July, due to high prices. Since then, state-owned oil companies have invited offers for oil from other regions through multiple tenders. Meanwhile, private companies like Reliance Industries and Nayara Energy have stayed on the sidelines. Nayara, in particular, is facing reduced output after facing European Union sanctions.
Some shipments of Urals cargoes have already arrived at the Indian ports, though with minor delays.
The Bloomberg report citing experts said that while there may be short term supply issues, the oil market is expected to adjust. If Russian supplies become harder to get, oil from the Middle East, especially from Iraq and Saudi Arabi, will likely replace them, as it’s both geographically closer and available in different quality grades.
A conflicting stance: Indian authorities seem to be in no mood to bow down
While several countries have rushed to make trade deals with the Trump administration, India has taken a strong stand, saying it is being treated unfairly and that the new measures are not reasonable. Prime Minister Narendra Modi also hit back at the steep tariffs on Thursday, saying that he is going to protect the farmers whatever may be the cost. India’s Ministry of External Affairs has defended its Russian oil purchases, saying they are important for the country’s energy needs. It also criticised the US for its hypocrisy, pointing out that other nations are doing the same.
India depends heavily on Russian crude oil to support the fast-growing economy and population. As the world’s most populous country, India is already the third-largest oil consumer. With demand continuing to rise quickly, it is expected to overtake China by 2030, according to Reuters.
At present, Russian oil makes up about 36% of India’s total oil imports, making Russia its biggest supplier, according to Muyu Xu, a senior oil analyst at trade data firm Kpler, who shared figures with CNN for the first half of this year.
Despite growing pressure from the US, India is not likely to give in immediately. The Modi government may increase its focus on buying more oil from the Middle East. However, reducing reliance on Russian oil is less likely and cannot happen all at once.