India will keep buying Russian oil despite Trump’s demands - Bloomberg
Photo: India will continue to buy Russian oil (Getty Images)
India continues to actively purchase oil from Russia despite US pressure and new sanctions. The country’s authorities show no signs of reducing imports, Bloomberg reports.
Indian refineries do not plan to scale back purchases of Russian oil, despite the resumption of trade talks with the United States.
Purchases will continue during the November and December delivery period, although volumes may be lower than the peak levels seen in recent years, sources say.
In August, Donald Trump imposed a 50% tariff on Russian oil supplies to India. He accused businesses of profiteering and spoke of “Modi’s war.” However, this only temporarily reduced the volume of imports.
Supply cuts and drone strikes
Russian oil shipments to India fell to 1 million barrels per day by mid-September - the lowest level in nearly two years. The decline was linked both to US tariffs and to Ukrainian drone strikes on Russian infrastructure.
However, after Trump’s phone call with Narendra Modi, during which he thanked the Indian Prime Minister for “support on ending the War between Russia and Ukraine,” pressure eased. If sufficient Urals volumes are available, imports could rise again.
New Delhi’s position
Indian officials regularly consult with state-owned and private refineries. However, no instructions to reduce imports have been issued. A strategy review may come later, depending on the progress of trade talks with the United States.
Much depends on Reliance Industries, the largest buyer of Russian oil. The company has a long-term contract with Rosneft, signed earlier this year.
Sanctions and alternatives
India traditionally avoids oil from Iran and Venezuela. But together with China, it actively takes advantage of discounts on Russian crude, capped by the G7 price ceiling.
Since September, European countries have lowered the price cap to $47.60 per barrel. However, in India, this level is considered unrealistic against the backdrop of the global Brent price of around $66.
Refinery situation
Private refiner Nayara Energy, partly owned by Rosneft, has gradually resumed operations after European sanctions. It has almost fully switched to Urals crude.
At the same time, Indian companies continue to seek alternatives. For example, Indian Oil Corp buys one tanker of oil from Brazil each month.
Russia currently covers about 40% of India’s oil needs, making the country the largest buyer of Russian seaborne oil. Before the war, the share was less than 1%.
Earlier, India’s Finance Minister Nirmala Sitharaman stated that India will continue purchasing Russian oil despite the 50% US tariffs on Indian companies.
White House Trade Adviser Peter Navarro said that India has turned into a hub for refining cheap Russian oil. Companies buy crude at a discount, process it, and export fuel to Europe, Africa, and Asia. Revenues flow to politically connected energy oligarchs and further into Putin’s military budget.
