In the face of India-US trade talks falling through and US President Donald Trump imposing one of the highest tariffs – totaling 50 per cent – on Indian imports, owing mostly to the country’s continued purchase of Russian crude, an Indian oil company chairman claims that they are “free to do” imports of Russian oil, based on purely commercial merits.
“There is no guidance or direction from the government to either stop or (continue) importing Russian oil,” said Vikas Kaushal, Chairman, Hindustan Petroleum Corporation Ltd (HPCL), on Friday.
Kaushal said the Indian government had given domestic oil companies a free hand in making procurement decisions based purely on economic considerations.
Russian crude oil formed only 13.2 per cent of the entire crude intake of 6.66 million tonnes by HPCL in the April-June quarter, which was then processed into fuels like petrol and diesel in its refineries.
India has not placed any more orders of Russian crude for the months of August and September, which Kaushal insists is a decision based on economy and not geopolitics.
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It was their Vizag refinery that purchased Russian crude in the first quarter, while their Mumbai refinery looked to other sources. But, a complete stoppage of oil intake from Moscow will not have any “significant” impact, Kaushal added.
“It’s not because of any geopolitical reason to look for oil from other sources. It was an economic decision based on what we needed to run in our refineries,” he said, adding that “even in a scenario where all of the Russian crude oil has to be replaced, it will not have any significant commercial impact”.
However, the company remains open to buying Russian oil if it becomes competitively priced again, he added.
India has been one of the largest importers of Russian crude since Russia started selling it at discounted rates to its allies after being sanctioned by the West for invading Ukraine in February, 2022.
In July, India bought 1.6 million barrels of Russian crude per day. But, after the discounts on the oil decreased to about USD 2 per barrel, India did not place any new orders for August and September.
Oil companies typically secure import contracts about two months in advance, meaning the supplies for August and September were arranged before Trump's August 7 announcement of higher tariffs.
Trump announced earlier this week he would impose an additional 25 per cent tariff on imports from India – raising the overall duty to 50 per cent. He also said there will be a “penalty” for buying Russian oil and arms.
Since the steep tariffs are likely to hit the USD 27 billion of non-exempt exports that India sends to the US, there has been talk about stopping or curtailing oil imports from Russia. India is currently stepping up efforts to diversify its crude import basket further.
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