India's imports of Russian oil set to be cut in half — Bloomberg

Read also India's biggest importer halts Russian oil purchases

"India’s imports of Russian oil are expected to drop by about half from already weaker recent levels, according to people with direct knowledge of the purchases, after US President Donald Trump issued an order detailing some terms of a trade deal between the two nations," Bloomberg writes.

According to the agency's sources, all state-owned and private oil refineries in India, except Nayara Energy Ltd., have suspended purchases of spot cargoes of Russian oil following Trump's statement on social media.

Although India has confirmed the agreement with the US, details, particularly regarding oil, have not yet been disclosed.

Purchases are expected to gradually decline from an average of 1.2 million barrels per day in January to about half that amount by April.

The White House order stipulates that India commits to ending direct or indirect imports of Russian oil, and US import tariffs may be increased if supplies resume.

Meanwhile, Nayara Energy, backed by Rosneft, is likely to continue purchasing around 400,000 barrels per day due to its sanctioned status and limited ability to work with other suppliers.

Other large companies — Indian Oil Corp., Bharat Petroleum, and Reliance Industries — are not placing new orders for now, leaving only already booked shipments.

Analysts note that after the reduction in Russian oil imports to India, they may stabilize at 400–500 thousand barrels per day, and the economic benefits of the trade agreement with the US will exceed the advantages of cheap oil from Russia.

Cooperation between India and Russia

After 2022, India became the main buyer of Russian seaborne oil. At that time, Russia was looking for new markets due to the loss of European demand.

India is currently significantly reducing its purchases of Russian oil. By March, imports are likely to fall below 1 million barrels per day and may subsequently decline to 500,000-600,000 barrels per day.

At the same time, India is increasing its oil purchases from other regions, particularly Africa, the Middle East, and South America.

Relations between US and India

On February 2, Trump announced that he had reached an agreement with Indian Prime Minister Narendra Modi to stop buying Russian oil. According to him, this will help stop the war in Ukraine.

On February 7, it became known that the US had canceled the 25% punitive tariffs on all Indian goods imposed due to the purchase of Russian oil.

According to the White House, the US and India have reached a framework agreement on mutually beneficial trade, including investment, tariff elimination, and market access.