Indian Oil PSUs Stop Buying Spot Russian Crude Amid Tariff Heat?
Indian state-owned oil refiners have paused spot purchases of Russian crude in the past week as discounts narrow and geopolitical pressure intensifies, industry sources told Reuters on Thursday.
Government sources, however, told News18 that the move is driven primarily by economics rather than politics. 'When Russian oil was initially purchased, it was at a discount. That discount has ended, and oil companies are free to look for cheaper options," one official said, adding that the shift 'should not be seen as an attempt to please America."
India, the world's third-largest oil importer, has been the biggest buyer of seaborne Russian crude in recent months. But in the past week, four of its key state-run refiners—Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), and Mangalore Refinery and Petrochemicals (MRPL)—have not placed fresh orders for Russian oil, sources familiar with their procurement plans told Reuters.
These refiners, which typically buy Russian barrels on a delivered basis, are now seeking alternative supplies in the spot market, including Middle Eastern grades such as Abu Dhabi's Murban and West African crude.
Private refiners Reliance Industries and Nayara Energy continue to import Russian oil, but state-run refiners collectively account for over 60% of India's 5.2 million barrels per day refining capacity.
On Wednesday, Trump went a step further, announcing a 25% tariff on all Indian goods starting August 1, along with an additional penalty on India's trade with Russia, including energy and defense purchases. 'I don't care what India does with Russia. They can take their dead economies down together, for all I care," Trump said. 'India's tariffs are too high, among the highest in the world. All things not good! India will therefore be paying a tariff of 25%, plus a penalty, starting on August 1st."
India is currently the second-largest buyer of Russian crude after China. Russian oil's share in India's total imports has risen sharply from 0.2% before the Ukraine war to nearly 35–40% today.
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