Of all the countries that India purchases crude oil from, Russia continued to top the list in the month of August, while the United States was its fifth-largest supplier.
The latest data on India’s crude oil supplies by global real-time data and analytics provider, Kpler, revealed little change in the country’s oil-sourcing decisions, although researchers insist it has more to do with timing than government policy in the face of higher tariffs announced by US President Donald Trump.
“Russian crude imports into India have so far remained resilient in August, although the stability we’re seeing now is mostly a result of timing since August cargoes were locked back in June and early July, well before any policy shifts,” noted Sumit Ritolia, Lead Research Analyst (Refining & Modeling) at Kpler.
While the fact remains that August’s purchases are based on decisions made weeks ago, Sumit says there has been no government directive to cut Russian oil volumes.
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“So, from a policy standpoint, it's business as usual,” he said.
Arvinder Singh Sahney, Chairman of Indian Oil Corporation (IOC), India’s largest oil firm, too affirmed the government has not instructed refiners to go slow on purchases from Moscow.
“Neither have we been told to buy, nor to not buy,” he said.
In the April-June quarter, Russian oil accounted for about 22 per cent of the crude processed by IOC. The volumes are expected to remains stable in the near future, said Sahney.
India’s purchase of Russian oil rose to 2 million barrels per day in August, which translates to at least 38 per cent of an estimated 5.2 million barrels per day of crude imported in the first half of August coming from Russia, as per Kpler’s data.
In July, India’s imports of Russian oil were at 1.6 million bpd. The rise in Russian crude imports this month, however, have come at the cost of purchases from Iraq, which declined to 730,000 bpd from 907,000 bpd in July, and Saudi Arabia, which fell to 526,000 bpd from 700,000 bpd last month.
The US was India’s fifth largest supplier at 264,000 bpd.
Any real adjustment in oil imports – whether due to tariffs, payment issues, or shipping friction – will only start to show in late September through October, pointed out Sumit.
India, the world’s third-largest oil consumer and importer, had benefitted from discounted Russian crude following the West’s sanctions on Moscow after its invasion of Ukraine in February, 2022.
From Russian oil comprising only 0.2 per cent of India’s imports before the war, they now make up 35-40 per cent of the country’s crude intake.
Since assuming office for the second time, Trump has been raging against India’s continued purchase of Russian crude, saying it indirectly funds the Ukraine war. His decision to slap an additional 25 per cent tariff on Indian imports – taking the total to 50 per cent – also stemmed from his ire at India purchasing oil from Moscow.
However, discounts have narrowed from a high of USD 40 per barrel to just USD 2 per barrel this month, although this is a slight rise from USD 1.5 per barrel last month. Yet, the change in prices was enough to trigger fewer imports for some firms.
Bharat Petroleum Corporation Ltd (BPCL) Director (Finance), Vetsa Ramakrishna Gupta, said imports from Russia had declined last month from 34 per cent of overall imports in the June quarter because of lowered discounts.
Yet, the company has no plans to decrease imports any further, Gupta said.
“As long as there is no new sanction on Russian oil, our procurement strategy will be 30-35 per cent of Russian crude for the remaining year," he informed.
India’s Petroleum Minister, Hardeep Singh Puri, had stated recently that the government plans to expand its crude oil purchase basket in the near future to ensure regular and uninterrupted supply chain of crude.
To this, Sumit said there is growing interest in sourcing more oil from the US, West Africa, and Latin America, but not necessarily because of any conscious shying away from buying Russian oil.
“Indian refiners are watching the situation closely. There's growing interest in sourcing more barrels from the US, West Africa, and Latin America, but that is not because they are walking away from Russian supply, but to hedge against possible disruptions. It's a shift in mindset – from margin maximization to energy security and logistical risk management,” he said.
The decision to buy oil, the researcher informed, is usually complex and does not involve knee-jerk reactions of banishing a country and taking to another.
“Crude buying is a continuous, complex, process-driven decision taken on the basis of refinery configuration, grade compatibility, and economics. Indian refiners still need to source 60–65 per cent of their crude from non-Russian suppliers, and that mix hasn't suddenly changed. What we're seeing is added flexibility, not a deliberate pivot. Until there's a clear policy change or sustained shift in trade economics, Russian flows remain part of India's crude basket and talk of replacement is premature,” he added.
Sahney too said that import of crude oil from Russia has not been sanctioned, and so India continues to purchase it keeping in mind economic considerations.
"Such purchases will continue unless sanctions are imposed. We are doing business as usual,” he said.
About talk of refiners being asked to increase purchases from the US in a bid to placate Trump, the IOC chairman replied: “Neither are we being told to buy more, nor to buy less from the US or any other destination. Economic considerations dictate our actions."
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