India’s Russian oil buy to dwindle, some irreplaceable imports to continue for now

New Delhi: India is set to gradually pare back its purchases of Russian crude oil following a new understanding with the United States that has already led to the withdrawal of a punitive American tariff, even as officials in New Delhi stop short of confirming an outright ban and analysts caution that a sharp, immediate drop in imports is unlikely. While Indian refiners have received no formal order to halt

Russian purchases, industry sources say they have been informally advised to begin scaling down new orders, marking a significant shift in a trade and geopolitical dispute that has strained ties between New Delhi and Washington since the Ukraine war.

On Friday, US President Donald Trump signed an executive order rescinding an additional 25 per cent duty on all Indian imports, a tariff that had been imposed last year over concerns about India’s growing reliance on discounted Russian oil. Trump said the rollback came after New Delhi committed to stop “directly or indirectly” importing Russian Federation oil and to buy more US energy products. The order also warned that if the US Secretary of Commerce determines India has resumed Russian oil imports, the administration could recommend reimposing the 25 per cent duty.

Indian officials, however, have avoided explicitly endorsing Trump’s characterisation of the deal. Asked about the US president’s claim, a government official pointed to earlier remarks by External Affairs Ministry spokesperson Randhir Jaiswal. “Insofar as India’s energy sourcing is concerned, the government has stated publicly on several occasions that ensuring the energy security of 1.4 billion Indians is the supreme priority of the government,” Jaiswal said. He added that India’s strategy rests on “diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics.”

According to three people familiar with the matter, Indian refiners have been told informally to start reducing future purchases from Moscow, though most will still honour contracts already placed. Such orders are typically booked six to eight weeks in advance, meaning Russian barrels will continue to arrive in the near term.

Several state-run refiners have already exited the Russian market. Hindustan Petroleum Corporation Ltd, Mangalore Refinery and Petrochemicals Ltd, and HPCL-Mittal Energy Ltd stopped buying Russian crude soon after Washington sanctioned major Russian exporters last year. Others, including Indian Oil Corporation and Bharat Petroleum Corporation Ltd, are expected to wind down their purchases in the coming weeks.

Reliance Industries Ltd, India’s largest crude buyer, had paused Russian purchases after US sanctions on Rosneft and Lukoil late last year. It is now expected to cease buying Russian oil again after a resumption cargo of 150,000 barrels is delivered over the next couple of weeks.

The likely outlier is Nayara Energy, in which Russia’s Rosneft holds a 49.13 per cent stake. The refinery was sanctioned first by the European Union and later by the United Kingdom because of its Russian links, leaving it with few willing suppliers. As a result, Nayara has been forced to buy Russian oil from non-sanctioned entities, a situation that sources say was explained to US trade officials in December. They added that Nayara may need an exemption or special arrangement under any new policy.

Data show that India’s dependence on Russian crude has already been declining since US sanctions on Rosneft and Lukoil took effect. Imports averaged 1.2 million barrels per day in December 2025, down from a peak of 2.1 million barrels per day in May 2023. In January, purchases slipped further to 1.1 million barrels per day, and were expected to fall below 1 million barrels this month or next. Under the new US understanding, some officials believe volumes could eventually halve.

India imports about 90 per cent of its crude oil needs. Since Western countries shunned Russian supplies after Moscow’s invasion of Ukraine in February 2022, Indian refiners have benefited from discounted Russian barrels, helping contain the country’s import bill.

Market analysts suggest that any shift away from Russia will be gradual. Sumit Ritolia, Lead Research Analyst for Refining and Modeling at Kpler, said the trade deal was unlikely to cause a sharp, immediate drop. “Russian volumes remain largely locked in for the next 8-10 weeks and continue to be economically critical for India’s complex refining system, supported by deep discounts on Urals relative to Brent,” he said. Ritolia added that imports were likely to stay broadly stable in the 1.1 million to 1.3 million barrels per day range through the first quarter and early second quarter, and that India was “unlikely to fully disengage in the near term.”

Prashant Vasisht of Icra said the deal appeared to involve India stepping up purchases of US crude and potentially beginning imports from Venezuela. He noted that Russian oil accounted for less than 2 per cent of India’s crude imports before financial year 2023, suggesting that alternatives were available. Icra estimates that replacing Russian crude with market-priced barrels would raise India’s overall import bill by less than 2 per cent. Vasisht also pointed out that Venezuelan crudes are heavy and sour, making them cheaper and attractive to many Indian refineries capable of processing them.

Neither the Oil Ministry nor the Commerce and External Affairs ministries have directly commented on any specific commitments regarding Russian oil. For now, the emerging picture is one of a cautious, phased adjustment rather than an abrupt break, shaped as much by refinery economics as by diplomacy.