Winning Bizness Desk
Mumbai. India’s leading refiners have stopped placing new orders for Russian crude oil for December deliveries, marking a significant shift in the country’s energy trade strategy. The move comes amid tightening US sanctions on Russian oil companies and ongoing trade negotiations between New Delhi and Washington. According to Bloomberg, five major Indian oil firms have not placed any new orders with Russian suppliers for next month, signalling growing caution among refiners as American restrictions take effect on November 21.
Major refiners skip Russian crude orders
Reliance Industries, Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), Mangalore Refinery and Petrochemicals Limited (MRPL), and HPCL-Mittal Energy have all skipped fresh orders from Russia for December. Together, these companies accounted for nearly two-thirds of India’s Russian oil imports so far this year. Their decision comes at a time when US sanctions against Russian energy giants like Rosneft and Lukoil are tightening global trade conditions.
IOC and Nayara continue limited Russian purchases
Among the key refiners, only Indian Oil Corporation (IOC) and Nayara Energy have continued their purchases for December. IOC is sourcing oil from non-sanctioned Russian suppliers to avoid violating international restrictions. Nayara Energy, in which Rosneft holds a 49 percent stake, remains heavily dependent on Russian crude supplies. The firm’s operations, however, may face mounting scrutiny if Washington expands its sanctions list.
Refiners scout for alternative global suppliers
With Russian imports declining, Indian refiners are now turning towards the US and West Asia to meet their crude requirements. IOC has already floated tenders for the purchase of 24 million barrels for the January-March quarter from non-Russian sources. HPCL has secured around 4 million barrels from the US and West Asia for January delivery. Meanwhile, major oil exporters such as Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) have reassured Indian authorities of stable supply commitments in the coming months.
Impact of US sanctions and trade negotiations
The decision by Indian refiners to pause Russian oil orders aligns with growing diplomatic efforts to finalize a new trade agreement between India and the United States. In August, US President Donald Trump had imposed a 50 percent tariff on India, including a 25 percent reciprocal duty and an additional 25 percent penalty for continuing Russian oil imports. The penalties were introduced to pressure Moscow economically and discourage nations from funding Russia’s ongoing military operations in Ukraine.
Trump hints at tariff reduction on India
On Monday, Trump stated that Washington and New Delhi were close to concluding a new trade agreement. He added that the US would gradually reduce the tariffs imposed on India following the country’s sharp cutback in Russian oil imports. “Yes, we will reduce the tariffs,” Trump said, acknowledging India’s efforts to scale down purchases from Moscow. The easing of tariffs could mark a new phase in US-India economic ties, potentially benefiting Indian refiners as they diversify energy sources and stabilize trade relations with Western partners.
Summary pointers:
- Five major Indian refiners halt Russian oil orders for December.
- Move follows tightening US sanctions on Russian oil companies
- Reliance, BPCL, HPCL, MRPL, and HPCL-Mittal skip December imports.
- IOC and Nayara Energy continue limited Russian purchases.
- Indian refiners seek new suppliers from the US and West Asia.
- Trump confirms India-US trade deal near completion.
- US to gradually reduce tariffs on India after oil import cut.
