© The Indian Express Pvt Ltd
Tags:
Journalism of Courage
ONCE again, US President Donald Trump has made a claim that may not square with facts — but is so closely linked to the ongoing diplomatic negotiations between India and US that New Delhi has little option but to tread with caution.
Trump claimed that Prime Minister Narendra Modi assured him Wednesday that India would stop buying Russian oil. The Ministry of External Affairs Thursday denied knowledge of any such conversation and reiterated its stated position on the Russian purchase for which the US had slapped an extra 25% tariff penalty in August.
New Delhi’s task ahead is cut out even as a trade delegation is engaged in a fresh round of talks to seal a bilateral trade deal.
Trump’s public posturing makes it all the more difficult for India to cut back on Russian oil immediately even if it wanted to. Oil, Russia’s biggest source of revenue, is a lever that the Trump administration believes it can use to force Kremlin’s hand into ending the Ukraine war. New Delhi is the second-largest buyer of its oil after Beijing, and is in the midst of sensitive trade pact negotiations with Washington.
New Delhi’s line is clear that it will not compromise on its strategic autonomy and will not be dictated to by anyone on whom it should be doing business with, particularly when it comes to Russia—an old and key strategic partner.
The government had not issued any directive to Indian refiners on Russian crude, and public sector refiners maintained that their decisions on buying oil from Russia, or anywhere else for that matter, was guided purely by economic and commercial considerations.
If India were to stop buying the discounted Russian crude, doing that quickly would be complicated and costly. Trump, too, said as much – that India could not stop buying Russian oil immediately and the process had started. Stopping Russian crude imports isn’t as simple as turning off a tap—it’s tied to long-term contracts, operational setups, and market adaptability that can’t be undone overnight.
“He (Modi) has assured me that there will be no oil purchased from Russia…He’s not buying his oil from Russia. It’s started. You know, he can’t do it immediately. It’s a little bit of a process, but the process is gonna be over soon,” Trump said.
Current status of India’s Russian oil imports
India’s Russian oil imports in September declined only slightly compared to August, indicating that US rhetoric has had no telling impact yet on Indian refiners’ oil purchases. India-bound crude oil loadings at Russian ports in September were also largely stable at August levels. So far in October, India’s Russian oil imports are trending higher than the levels seen over the past three months.
India’s Russian oil imports in September were 1.60 million barrels per day (bpd), down around 5 per cent from August levels, according to provisional vessel tracking data from global real-time data and analytics provider Kpler.
As of October 10, India’s Russian oil imports have averaged at 1.81 million bpd. Oil loadings headed for India at Russian ports averaged at 1.52 million bpd, flat on a month-on-month basis. Notably, destinations of sizable volumes of Russian crude loadings in September—over 300,000 bpd—were not known, and much of this oil could make its way to India, according to industry watchers.
Industry sources said the slight dip in volumes of Russian oil imports into India in recent months appears to have been more because of the rise in freight cost and a narrowing of discounts on Russian crude rather than pressure from the US. Despite the slight decline in volumes, Russian oil continues to command a one-third share in India’s total oil imports.
The Indian government has consistently maintained that the country will buy oil from wherever it gets the best deal, as long as the oil is not under sanctions. There are no sanctions on Russian oil; it is only subject to a price cap imposed by the US and its allies that applies if Western shipping and insurance services are used for transporting the oil.
Although there have been no strong signals of any meaningful reduction in oil imports from Russia, there has been a stronger push for diversification of supply from various regions by India’s public sector refiners.
While there has been some reduction in import of Russian crude by the public sector refiners in recent months, private sector refiners’ imports have remained strong.
When Russia invaded Ukraine in February 2022, Moscow’s share in New Delhi’s oil imports was less than 2 per cent. With much of the West snubbing Russian crude following the invasion, Russia began offering discounts on its oil to willing buyers. Indian refiners were quick to avail of the opportunity, leading to Russia—earlier a peripheral supplier of oil to India—emerging as India’s biggest source of crude with a commanding market share, displacing the traditional West Asian suppliers.
And while discounts on Russian crude have narrowed considerably over time, even lower discount levels are lucrative for India, given that the country in the world’s third-largest importer of crude oil and depends on imports to meet around 88 per cent of its requirement.
Replacing such massive volumes of Russian crude is no mean task. In the eventuality that they are indeed forced to replace the Russian barrels, a multi-regional approach would be required, which would entail buying a lot more from India’s traditional oil suppliers in West Asia like Iraq, Saudi Arabia, and the UAE, while also increasing imports from other regions—West Africa, North America, and Latin America.
According to experts, while Indian refiners can operate without Russian crude from a technical standpoint, the shift would involve major economic and strategic trade-offs. At the very least, India would try and work out a calibrated reduction of oil imports from Russia over an extended period, instead of a complete halt in purchases.
West Asian medium-sour crude grades, while closer in quality to Russia’s flagship Urals crude, come with higher costs, tighter availability, and logistical challenges, which could make the transition to these barrels commercially painful for Indian refiners, although not prohibitive.
“A full stop on Russian crude would involve major logistical, political, and economic hurdles. At best, India might slowly scale down imports under pressure, but treating this as a done deal would be premature…Even if there’s an intent to reduce imports, it won’t happen overnight,” said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler.
Forcing India to halt Russian crude imports without a universal embargo also risks intensifying competition for the same pool of non-Russian barrels. While alternatives exist—from the Middle East, Africa, or the US—they come with higher costs, tighter availability, and logistical challenges. A sudden redirection of Indian demand would tighten regional balances and likely push up oil prices, affecting both affordability and refining economics.
