India, the world’s third-largest oil importer. Now India halts Russian oil purchase by its state-owned refineries due to shrinking discounts and U.S. President Donald Trump’s recent warnings. The decision, affecting major refiners like Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp, and Mangalore Refinery Petrochemical Ltd, comes as discounts on Russian oil dropped to their lowest since 2022, driven by reduced Russian exports and steady global demand. These refiners, which account for over 60% of India’s 5.2 million barrels per day refining capacity, have not sought Russian crude for about a week, turning instead to spot markets for Middle Eastern grades like Abu Dhabi’s Murban crude and West African oil.
On July 14, 2025, Trump threatened 100% tariffs on countries purchasing Russian oil unless Moscow reaches a peace deal with Ukraine by August 8. He also announced a 25% tariff on Indian goods effective August 1, citing India’s trade ties with Russia, though he noted negotiations are ongoing. On Monday, the deadline for secondary sanctions on Russian oil buyers was shortened to 10-12 days from 50, adding pressure on India’s state refiners. Private refiners, such as Reliance Industries and Nayara Energy, which is partly owned by Russia’s Rosneft, continue to import Russian oil under annual contracts, handling nearly 60% of India’s 1.8 million barrels per day of Russian crude imports in the first half of 2025.
EU When India Halts Russian Oil
The shift has raised concerns about supply chain stability, as European Union sanctions further complicate trade logistics and financing, even for buyers adhering to price caps. India has consistently opposed unilateral sanctions, prioritizing energy security. Social media discussions on X highlight mixed sentiments, with some users questioning the feasibility of replacing Russian oil and others noting the economic strain of U.S. tariffs on India’s trade balance. The pause reflects a cautious approach by state refiners as they await clearer government guidance, balancing geopolitical pressures with domestic energy demands.
Published in SouthAsianDesk, August 1st, 2025
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