India refineries seek clarity on Russian crude after US trade deal signals shift

Indian oil refiners have not received any formal instruction from the government to immediately stop purchasing Russian crude and would require time to wind down cargoes already booked, refinery sources said on Tuesday, following the announcement of a new trade agreement between India and the United States.

On Monday, US President Donald Trump said a trade deal with Prime Minister Narendra Modi included a commitment by India to end Russian oil purchases, but provided no timeline or implementation details. Refining officials said cargoes loading in February and scheduled to arrive in March had already been contracted and could not be cancelled abruptly.

India has slowed its intake of Russian crude in recent weeks, but refiners have continued to lift previously agreed shipments, the sources said, speaking on condition of anonymity as they were not authorised to comment publicly. Future buying decisions, they added, would depend on guidance from New Delhi.

Under the trade agreement, Trump said US tariffs on Indian goods would be cut to 18% from 50%, in return for India lowering trade barriers, halting Russian oil imports and replacing them with supplies from the United States and potentially Venezuela. Modi welcomed the tariff reduction but did not publicly address the issue of Russian oil.

Industry participants cautioned that a sudden, complete halt to Russian imports could disrupt domestic refining operations, particularly at Nayara Energy’s 400,000-barrel-per-day refinery, which is partly Russian-owned and has relied entirely on Russian crude since European Union sanctions were imposed on the company last July. A source said Nayara does not plan to load Russian cargoes in April, as the refinery will shut for maintenance from April 10 for more than a month.

Two refiners have paused placing new Russian oil orders in recent days after securing volumes for February and March, according to industry sources. One refiner said March cargoes could be deferred into April to limit India’s overall intake.

India emerged as the largest buyer of discounted Russian seaborne crude after Moscow’s invasion of Ukraine in 2022, as Western sanctions targeted Russia’s energy revenues. Russian oil imports peaked at around 2 million barrels per day last June but have since declined, hitting a two-year low in December, trade data showed.

Indian Oil Corp, Bharat Petroleum Corp and Nayara Energy have been regular buyers of Russian crude, while Reliance Industries resumed purchases in February at up to 150,000 barrels per day after a brief pause, a company executive said last week. Government and company officials did not respond to requests for comment.

Sources said India is preparing to gradually reduce Russian oil imports to below 1 million barrels per day, with longer-term levels potentially falling to 500,000–600,000 bpd. While Trump has suggested India could replace Russian supplies with Venezuelan oil, refinery officials said only Reliance and Nayara have the capacity to process heavy Venezuelan crude at scale, and state refiners could substitute less than 10% of Russian volumes.

As Russian purchases ease, Indian refiners have increased sourcing from the Middle East, Africa and South America to diversify supplies and manage transition risks, industry sources said.