India's imports of Russian oil are expected to drop by about half from already weaker recent levels, according to people with direct knowledge of the purchases, after US President Donald Trump issued an order detailing some terms of a trade deal between the two nations.
All state-owned and private refiners, with the exception of Nayara Energy Ltd., had paused buying any spot cargoes since Trump first mentioned the deal in a social media post about a week ago, according to the people, who asked not to be named discussing sensitive information. While India confirmed the trade deal, it has not commented on details including oil.
That hiatus is now likely to be extended following the executive order issued on Friday, they said, with purchases likely to gradually halve, from an average of 1.2 million barrels a day in January, by April.
The White House said in the order that “India has committed to stop directly or indirectly importing Russian Federation oil,” and that import tariffs on all Indian goods may be raised if it resumes purchases.
Indian foreign ministry spokesperson Randhir Jaiswal in a statement Saturday said that the nation's energy security was its “supreme priority,” and that India would continue to diversify its imports.
The Indian refiners had spent an uneasy weekend scrutinizing the US order, the people said, adding that they hadn't yet received any guidance from New Delhi and were not expecting it to come any time soon.
The processors have found themselves in a tight spot politically as their enthusiasm for discounted oil runs up against increasingly aggressive demands from Washington, which has linked the purchases to the wider trade deal. The South Asian nation went from buying almost no Russian crude from Moscow before the invasion of Ukraine in early 2022 war to becoming the world's biggest importer of the oil.
The US stepped up its pressure in October, sanctioning Russian producers Rosneft PJSC and Lukoil PJSC. The 1.2 million barrels a day of purchases in January, according to Kpler data, compare with a high point of around 2 million barrels a day in 2024.
Nayara, which is backed by Rosneft, would probably keep buying about 400,000 barrels a day of Russian oil, the people said, citing the company's inability to source crude from any other producers due to its sanctioned status. However, it's not clear if Nayara has been issued any exemptions or permission from Washington and New Delhi to proceed with purchases.
Indian imports are likely to settle around 400,000 to 500,000 barrels a day once the unwinding is complete, Vandana Hari, the founder of Singapore consultancy Vanda Insights. “The overall economic benefit of a trade deal with the US will outweigh the advantage of discounted crude imports.”
Purchases of Russian oil by Indian Oil Corp., Bharat Petroleum Corp. and Reliance Industries Ltd. are now highly uncertain, said the people. All three refiners will take delivery of already booked cargoes but have paused placing fresh orders, they said.
India's oil ministry, Indian Oil, Bharat Petroleum, Reliance and Nayara didn't respond to emails seeking comment.
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