Indian refiners are set to significantly reduce imports of Russian oil, according to industry sources on Thursday, in response to fresh US sanctions targeting two prominent Russian producers to diminish Moscow’s revenue for its war in Ukraine.
India has emerged as the largest purchaser of cheap seaborne Russian crude since Moscow’s 2022 invasion of Ukraine, acquiring almost 1.7 million barrels per day over the initial nine months of this year.
Russian oil is a significant source of contention for US President Donald Trump in extended trade negotiations with India. Fifty percent of his 50% tariffs on Indian imports are a response to those acquisitions.
Reliance Industries RELI.NS, a privately-owned entity and the leading Indian purchaser of Russian petroleum, intends to reduce or completely stop its importation of Russian oil, according to two informed sources.
A Reliance representative stated, “The recalibration of Russian oil imports is in progress, and Reliance will fully adhere to the guidelines set by the Government of India,” in answer to an inquiry regarding potential reductions in crude imports from Russia.
The oil ministry of India did not promptly respond to a request for commentary.
Indian state refiners are examining their Russian oil trade records to confirm that no supplies will be sourced directly from Rosneft and Lukoil, following the US sanctions on these oil companies, according to a source with direct knowledge of the situation, reported on Thursday.
On Wednesday, President Trump enacted Ukraine-related penalties against Russia for the first time during his second term, specifically targeting Lukoil LKOH.MM and Rosneft ROSN.MM, as his frustration with Russian President Vladimir Putin escalates.
The US Treasury has granted corporations until November 21 to terminate their dealings with Russian oil producers, as stated in a sanctions announcement on Wednesday.
“There will be significant reductions.” A refinery source indicated that we do not expect it to reach zero immediately, as some barrels will enter the market before the deadline.
State refiners such as Indian Oil Corporation (IOC.NS), Bharat Petroleum Corporation (BPCL.NS), Hindustan Petroleum Corporation (HPCL.NS), and Mangalore Refinery and Petrochemicals (MRPL.NS) are scrutinising bills of lading for Russian crude shipments arriving post-November 21 to ensure they do not originate directly from Rosneft or Lukoil, according to a source.
The corporations did not promptly reply to requests for commentary.
Indian state refiners infrequently procure Russian oil directly from Rosneft and Lukoil, as their acquisitions are generally conducted via intermediaries, according to trade sources.
Reliance, which operates the world’s largest refining plant in Jamnagar, western Gujarat, has a long-term agreement to procure approximately 500,000 barrels per day of crude oil from the Russian oil giant Rosneft. The refiner purchases Russian oil from intermediaries.
Nayara Energy, with Rosneft as its largest stakeholder, also procures oil from the corporation. Nayara did not promptly reply to a request for commentary.
