Indian refiners prepare to cut Russian oil imports, sources say

NEW DELHI: Some Indian refiners are preparing to cut Russian oil imports, with expectations of a gradual reduction, three sources familiar with the matter told Reuters, with the U.S. pressuring New Delhi to stop buying Russian crude to help end the war in Ukraine.

AI Brief

India emphasises protecting consumers and securing energy supply, avoiding direct response to Trump's comments on Russian oil.
The US doubled tariffs to pressure India to reduce Russian oil imports, linking energy decisions to trade negotiations.
India still imports significant Russian oil due to cost advantages, while switching sources could raise global prices and inflation.

U.S. President Donald Trump on Wednesday said Prime Minister Narendra Modi had assured that India will stop buying oil from Russia, India's top source of imported oil.

India said on Thursday the country's two main goals were to ensure stable energy prices and secure supply.

"It has been our consistent priority to safeguard the interests of the Indian consumer in a volatile energy scenario. Our import policies are guided entirely by this objective," the foreign ministry statement said in a statement.

The statement did not refer to Trump's comment about India's purchases of Russian oil.

TRADE-OFF AGAINST STEEP TARIFFS

Indian officials are in Washington for trade talks, with the the U.S. having doubled tariffs on Indian goods to pressure New Delhi to reduce Russian oil imports. U.S. negotiators have said curbing those purchases would be crucial to reducing India's tariff rate and sealing a trade deal.

India and China are the two top buyers of Russian seaborne crude exports, taking advantage of the discounted prices Russia has been forced to accept after European buyers shunned purchases and the U.S. and the European Union imposed sanctions on Moscow for its invasion of Ukraine in February 2022.

"So I was not happy that India was buying oil, and he (Modi) assured me today that they will not be buying oil from Russia," Trump told reporters during a White House event on Wednesday.

India's foreign ministry said it was discussing deeper energy co-operation with the United States.

"The current Administration has shown interest in deepening energy cooperation with India. Discussions are ongoing," foreign ministry spokesperson Randhir Jaiswal said in the statement.

Indian refiners said they have not been formally told by the government about stopping Russian oil purchases, sources said. They declined to be named as they are not authorised to speak to media.

The sources said it would be difficult to immediately stop buying Russian oil as a sudden switch to buying other crudes would drive up global oil prices and threaten to stoke inflation.

In April to September, the first six months of this fiscal year, India imported 1.75 million barrels per day of Russian crude, with its share declining to about 36% of India's total oil imports from 40% in the same period a year earlier, government data showed.

India's U.S. crude imports rose 6.8% on year to about 213,000 bpd, making up 4.3% of imports.