Indian Refiners Plan Cuts to Russian Oil Imports
Indian Refiners Plan Cuts to Russian Oil Imports
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Key Points
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India is the world’s third-largest crude buyer, and Russian oil accounted for more than half of its imports in some recent months as refiners sought to offset high prices and disruptions in Middle Eastern supplies.
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Russian crude imports have already declined to an estimated average of 1.9 million barrels per day in September, the lowest level since April, according to Kpler.
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Russian Urals delivered to India cost about $133 a barrel at the end of last week, while Oman and Murban crude were several dollars more expensive, according to Argus Media.
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The tariff threat is not entirely unprecedented for India: the country previously faced similar U.S. levies, although those measures were later withdrawn.
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Negotiations for November Russian crude cargoes would normally begin in the final week of September, placing India’s next purchasing cycle directly within the current period of uncertainty.
Indian oil refiners are considering cuts to Russian crude purchases for November deliveries as a new U.S. law gives President Donald Trump authority to impose tariffs up to 100% on countries buying Russian oil Mezha. Russia supplied more than 35% of India's crude imports recently, but Economic Times reports refiners now weigh switching to Middle Eastern alternatives despite higher costs and supply constraints near the Strait of Hormuz.
The shift matters because India is the world's third-largest crude buyer with rising demand toward record levels from refinery expansions. Negotiations for November cargoes would normally start by late September, placing India's next purchasing cycle directly in the tariff uncertainty window.
Russian Oil Hit By Tariff Threat
A new U.S. law now allows President Trump to impose up to 100% tariffs on nations importing Russian crude. News18 reports that JPMorgan Chase CEO Jamie Dimon urged American lawmakers to reconsider, arguing the U.S. should understand how India uses the oil before punishing it. The tariff threat is not entirely new — India previously faced similar U.S. levies, though those measures were later withdrawn.
Indian refiners must decide on November shipments within weeks. The sudden legal change creates immediate pressure. Delaying purchases or cutting volumes could reduce India's exposure to tariffs while alternative suppliers work to fill the gap.
Russian Imports Already Sliding Since Spring
Russian crude imports fell to an estimated 1.9 million barrels per day in September, the lowest level since April, according to shipping data tracker Kpler. Economic Times reported that Russia's share of India's oil imports dropped 16.5% in August alone as supplies from the Middle East increased. Abu Dhabi National Oil Company (ADNOC) has expanded sales from outside the Strait of Hormuz.
The decline reflects both the tariff threat and Middle Eastern supply improvements. However, refiners still rely on Russian crude for cost advantages and supply flexibility when Hormuz disruptions limit other sources.
Middle Eastern Oil Costs More Than Russian Supplies
Russian Urals delivered to India cost about $133 per barrel last week, according to Argus Media pricing data. Oman and Murban crude from the Middle East were several dollars more expensive. Replacing Russian volumes entirely would raise India's refinery costs significantly while straining already tight global supply routes.
Indian refiners face a squeeze: stick with cheap Russian oil and risk U.S. tariffs, or buy pricier Middle Eastern grades and accept higher operating costs. The choice depends on whether Trump follows through on the tariff threat and how quickly alternative suppliers can ramp up sales to India.
India's Rising Demand Adds Pressure to Suppliers
India's oil demand is climbing toward record levels as the country expands refinery capacity. Economic Times reports that Russian crude has been essential to meeting that growth without spiking costs. Mezha notes that the current period of uncertainty directly overlaps with the start of November cargo negotiations.
Refiners must balance three pressures: growing domestic demand, tariff risks from Washington, and limited alternatives. Any cuts to Russian imports would need replacement barrels from the Middle East, West Africa, or other suppliers — but those sources are costly and capacity-constrained.
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