Indian refiners scour globe for more oil ahead of Trump-Putin summit

Business Standard

a day ago

By Serene Cheong and Rakesh Sharma
Refiners in India, the world's top importer of seaborne Russian crude, are scouring the globe for alternative supplies, hedging their bets ahead of a summit between the US and Russian leaders.
President Donald Trump, eager to gain traction in talks with Vladimir Putin, has demanded that India stop purchases of cut-price crude and doubled tariffs on the country's goods as punishment for imports he has said were fuelling 'the war machine'. The move left refiners in the world's third-largest oil consumer looking to switch up their procurement plans.
India's state processors have bought large volumes of non-Russian crude this week for prompt September-October delivery, extending a buying spree spurred by an early threat by Washington. Indian Oil Corp. and Bharat Petroleum Corp. have taken cargoes from all corners of the market including the US, but also Brazil and the Middle East.
These spot market purchases come on top of supplies from long-term sellers like Saudi Arabia, which is set to send about 22.5 million barrels of crude to India for September loading, traders said. India's monthly imports from Saudi last exceeded that level in September 2024, according to data from analytics firm Kpler.
The meeting between Trump and Putin in Alaska on Friday will be closely watched by the industry, eager for clues as to whether the US will ease pressure on Russian sales — or crank it up. India has long had close ties to Russia and Foreign Affairs Minister S. Jaishankar will be traveling to Moscow next week with a delegation that's likely to include Petroleum Secretary Pankaj Jain, the most senior bureaucrat in the oil ministry.
Jaishankar will hold talks with his Russian counterpart Sergei Lavrov on Aug. 21, according to a post on X by Russia's Ministry of Foreign Affairs on Wednesday.
Historically, India has not been a significant importer of Russian crude, depending more heavily on the Middle East. All that changed in 2022, after the invasion of Ukraine and a $60-per-barrel price cap imposed by the Group of Seven nations that aimed to limit the Kremlin's oil revenues while keeping supplies flowing globally.
India's imports amounted to about 1.7 million barrels a day, or nearly 37% of the nation's overseas purchases, in mid-2025. They were mostly of Urals crude, a medium-density grade that can be interchanged with barrels from across the Middle East. While the total volume that India would need to find as replacement is significant, the task has been made less challenging in a market awash with oil after the return of OPEC+ barrels and softer demand from major economies such as China.
For now, Indian private refiners such as Reliance Industries Ltd. and Nayara Energy are still expected to continue buying Russian crude, some of which is procured via term contracts, even as state refiners hold back on spot purchases for loading in October.
Russian producers have already started to tout Urals more aggressively to Chinese buyers in response to the potential shift. Prices have been cut for offers of Urals for delivery in September to October, suggesting some of the oil was diverted from Indian buyers.
Indian importers who still want to take Russian crude are being met with hesitation from banking and logistics partners worried about the prospect of Trump's threat of so-called secondary sanctions on those supporting the trade. In light of such reservations, traders said some private players may increasingly look at buying more Russian crude using smaller banks, Chinese yuan and dark-fleet tankers.
Trump has warned he would impose 'very severe consequences' if Putin doesn't agree to a deal later this week, a threat that the oil market will struggle to fully quantify and prepare for. Oil-market observers have said that the Chinese may be wary of piling in on Russian crude — taking supplies that it doesn't desperately need due to ample flows from Iran — to avoid Washington's wrath.