The government-owned refineries have halted purchases of Russian crude over the past week as discounts narrowed and US President Donald Trump intensified warnings against buying oil from Moscow.
India, the world’s third-largest oil importer, has become the biggest buyer of seaborne Russian crude—an important revenue source for Moscow as its war in Ukraine enters a fourth year.
Sources told Reuters that Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), Hindustan Petroleum Corp (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) had not sought Russian cargoes in the past week. These refiners typically buy Russian crude on a delivered basis.
Instead, they turned to spot markets for replacement supplies, favouring Middle Eastern grades such as Abu Dhabi’s Murban crude, and West African oil.
Private refiners Reliance Industries and Nayara Energy—which is majority-owned by Russian firms including Rosneft—continue to lift Russian oil under long-term contracts. In the first half of 2025, private refiners accounted for nearly 60 percent of India’s average imports of 1.8 million barrels per day (bpd) of Russian crude. State refiners, which control over 60 per cent of India’s total refining capacity of 5.2 million bpd, purchased the rest.
Russian oil discounts have narrowed to their lowest levels since 2022, when Western sanctions were imposed. This is due to lower Russian export volumes and sustained global demand, prompting state refiners to reassess purchases.
Moreover, refiners are wary of recent EU restrictions that could complicate trade financing—even for those adhering to the $60-per-barrel price cap. India has reiterated its opposition to unilateral sanctions.
On July 14, Trump threatened 100 percent tariffs on countries continuing to buy Russian oil unless Moscow agrees to a substantial peace deal with Ukraine. Earlier this week, he also shortened the window to impose secondary sanctions on Russian crude buyers—from 50 days to just 10–12 days.
Separately, Trump on Wednesday imposed a 25 percent tariff on goods imported from India, but said negotiations were still ongoing. He further warned of possible penalties for Indian purchases of Russian arms and oil.
Russia remains India’s top oil supplier, accounting for about 35 per cent of overall imports.
In a rare move, traders said Reliance this month booked Abu Dhabi Murban crude for October loading, reflecting a shift in sourcing strategy.
