Indian refiners will need a wind-down period to complete Russian oil deals before imports from that country can be halted, and they have so far not been ordered by the government to stop such imports, two refining sources said.
US President Donald Trump announced a trade agreement with Indian Prime Minister Narendra Modi on Monday that included a halt to Indian oil purchases from Russia.
Indian companies have already booked cargoes loading in February and arriving in March, so a wind-down period would be needed to fulfil existing commitments, the sources said. They spoke on condition of anonymity because they were not authorised to speak with the media.
The trade deal with India would slash US tariffs on Indian goods to 18 per cent from 50 per cent in exchange for India lowering trade barriers and stopping its purchases of Russian oil. It would buy oil instead from the US and potentially Venezuela.
India became the top buyer of discounted Russian seaborne crude after the 2022 outbreak of war in Ukraine, generating a backlash among Western nations that targeted Russia’s energy sector with sanctions.
The United States wants to curb Russia’s oil revenues to make it harder for Moscow to fund the war.
“We spoke about many things, including Trade, and ending the War with Russia and Ukraine,” Trump said of his discussion with Modi. “He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela.”
Modi followed with a post on social media that he was delighted with the reduced tariff, but made no mention of a halt to purchases of Russian oil.
India will gradually cut its Russian oil imports, a third source said, adding that a complete halt would hit operations at Russia-backed Indian refiner Nayara Energy’s 400,000-barrel-per-day refinery.
Nayara relies solely on Russian crude after Iraq’s SOMO and Saudi Aramco pulled back amid payment difficulties following European Union sanctions imposed on the refiner in July last year.
This source said Nayara’s Russian oil imports in April would be negligible as it shuts its refinery for over a month from April 10 for maintenance.
Reuters last week reported that the United States had told Delhi it could soon resume purchases of Venezuelan oil to help replace imports of Russian oil. Trump said on Saturday that India would buy Venezuelan oil.
Indian Oil Minister Hardeep Singh Puri said last month India was diversifying its crude sources as its Russian oil imports fall.
Data from trade sources showed India’s Russian oil imports fell to their lowest level in two years in December, while OPEC’s share of Indian imports rose to an 11-month high.
Indian refiners have been buying more oil from Middle Eastern, African and South American countries as they began scaling back Russian oil purchases, following discussions at a government meeting about accelerating a US-India trade deal, refining sources said last month.
