Nayara's future unsure: India may bargain with US for Russian crude

NEW DELHI: US President Donald Trump's threat to bring back the 25% "penalty" if India does not stop buying Russian crude has deepened the question mark on the operations of Nayara refinery in Jamnagar.

The crisis facing the refinery has triggered talks about change of ownership. While the refinery, under normal circumstances, would qualify to be a good buy, US's hardline stance may prove to be a dampener for prospective buyers, something which is going to persist unless there is a dramatic breakthrough in the talks to get Russia to pause its aggression against Ukraine.




Rosneft - Russia's state-run energy giant that has been sanctioned by the Trump administration in order to pressure Vladimir Putin into agreeing to pause his offensive against Ukraine - owns majority stake in the 20 million metric tonnes per annum refinery. Located at Vadinar (Gujarat), Nayara, the country's second-largest single-site refinery, specialises in processing heavy crude. Until the US sanctions were imposed, it was almost entirely dependent on Russian crude as feedstock.

Also read | Trump removes 25% penal tariff: What happens if India stops buying Russian crude oil?

Analysts said with the immediate future of the refinery in mind, India may continue negotiating with the Trump administration to allow import of smaller volumes of Russian crude.

Indian refineries have been cutting down on purchase of Russian crude. Though observers said India cannot immediately halt purchases even if it decides to reduce dependence on Urals as refiners have already booked Russian cargoes for the next eight to 10 weeks and cancelling them is not feasible, it does not remove the uncertainty about the fate of Nayara.

"My sense is that India will still bargain with the US to import some amount of oil from Russia, especially for Nayara refinery," said Prashant Vasisht, senior V-P at ratings agency ICRA.

Energy expert Narendra Taneja said India will continue importing oil from Russia too, though volumes would decline. "India will continue to get oil supplies from Russia for two reasons - to assert its strategic autonomy and to maintain the right optics for domestic political consumption," he said.

Also read | Oil imports decided by buyers, trade deal doesn’t decide: Piyush Goyal says diversification is in India's strategic interest

"Since India has to make purchases of $500 billion from the US over a period of five years - imports of oil, gas and LPG are the best way to clock the numbers up quickly, which overall is not a bad idea since what we are going to back in return (capital, technology and bigger access to American markets) is quite attractive," he said.

India imports almost one-third of its crude from Russia, and purchases fell to $2.7 billion in Dec 2025 - the lowest monthly value of shipments in the last three years - and nearly 27% lower than the $3.7 billion recorded in Nov, according to commerce department data.

Despite the decline, Russia remained the largest crude supplier to India in 2025-26, accounting for 31.5% of purchases worth $105.1 billion during April-Dec.
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