Indian refiners are scaling back discounted Russian crude purchases amid US tariff pressure and trade talks.
Imports are shifting towards West Asia, the US, and South America to diversify supply and ease geopolitical scrutiny.
The move could support efforts to lower punitive US tariffs linked to India’s energy trade with Russia.
Indian refiners are increasingly shifting crude imports away from Russia towards West Asia and South America, a pivot that could help India advance a trade deal with the US and secure tariff relief. New Delhi currently faces tariffs of up to 50% from Washington, including a 25% punitive levy linked to its energy imports from Moscow.
India became one of the largest buyers of Russian crude following the outbreak of the Russia–Ukraine war in 2022. However, the trade has drawn intense scrutiny from the US and other Western allies, who allege that increased purchases by India and China have helped fuel the conflict between Kyiv and the Kremlin.
1 January 2026
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Amid growing Western backlash and punitive US tariffs, Indian refiners have begun scaling back imports of discounted Russian crude. According to a Reuters report citing sources, the move follows discussions at a government meeting aimed at accelerating ongoing trade negotiations with Washington.
US President Donald Trump has acknowledged that India’s dependence on Russian crude has declined, though tariffs have yet to be rolled back. Indian officials are prioritising the removal of the punitive levy and are seeking to bring overall tariffs down to 25%, as finalisation of the trade deal remains delayed.
According to Reuters, the oil ministry’s Petroleum Planning and Analysis Cell is collecting weekly data on refiners’ purchases of Russian and US crude. State-owned refiner Bharat Petroleum Corp has signed one-year tenders to buy Iraqi Basrah and Omani crude from trader Trafigura. Under a separate tender, Indian refiners are also in the market to purchase Murban crude from the United Arab Emirates.
As per reports, Trafigura will supply four cargoes of Oman crude every quarter from April at a discount of 75 cents a barrel to Dubai benchmarks, along with one cargo of Basrah Medium at a discount of 40 cents a barrel to the grade’s official selling price.
The Reuters report said state-owned refineries Hindustan Petroleum Corp, Mangalore Refinery and Petrochemicals, and private refiner HPCL-Mittal Energy Ltd have already stopped buying Russian oil. In December, India’s oil imports from Russia fell to their lowest level in two years.
Indian refiners are also stepping up efforts to diversify supplies by tapping South American oil markets. Last week, Indian Oil Corp (IOC) brought in its first cargo of Ecuadorian Oriente crude for end-March delivery, Reuters reported. IOC purchased 2 million barrels of medium-heavy sour Oriente crude, according to sources. Refiners have also increased purchases of US crude and are sourcing oil from Venezuela.
