After tariff cutdown by US, India likely to scale down Russian oil buys

India will reportedly reduce its Russian oil imports following the deal with the US, who has agreed to cut trade tariffs in exchange. US President Donald Trump signed an order removing the additional 25 per cent duty on Indian imports after India promised to decrease Russian oil purchases.

While refiners haven't received official orders to stop buying Russian oil, they've been informally told to scale back, according to sources quoted by PTI.




Officially, when asked during the MEA briefing last week about India putting a stop on buying Russian oil, spokesperson Rabdhir Jaiwal cited energy security guiding India's decisions. “The government has stated publicly on several occasions that ensuring the energy security of 1.4 billion Indians is the supreme priority of our government. Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy to ensure this. All of India’s decisions were taken and will be taken with this in mind,” he said.

Most Indian refiners will honor their existing orders but won't place new ones. Companies like HPCL, MRPL, and HMEL already stopped buying Russian oil after US sanctions last year. IOC and BPCL are planning to wind down their purchases. Reliance Industries, India's biggest buyer, will likely stop after receiving its final shipment of 150,000 barrels.

Nayara Energy stands as an exception. The company faces sanctions from the EU and UK due to its Russian connections, with Rosneft holding a 49.13 per cent stake. This has left Nayara with limited options, forcing it to continue buying Russian oil from non-sanctioned entities.

India's Russian oil imports have been falling since US sanctions hit Rosneft and Lukoil. December 2025 saw imports of 1.2 million barrels per day, down from 2.1 million in May 2023. January saw further decline to 1.1 million barrels. Experts expect this number to drop below 1 million soon.

"Russian volumes remain largely locked in for the next 8-10 weeks and continue to be economically critical for India's complex refining system," said Sumit Ritolia from Kpler. He expects imports to stay between 1.1-1.3 million barrels daily through early Q2.

India, which imports 90% of its oil needs, benefited from discounted Russian oil after Western sanctions following the Ukraine invasion. The new US deal might include increased American oil purchases and potential Venezuelan oil imports.

Prashant Vasisht from Icra noted that replacing Russian oil shouldn't significantly impact India's import bill, estimating an increase of less than 2%. He suggested Venezuelan crude, being cheaper and suitable for Indian refineries, could be a viable alternative.