Indian refiners have halted new purchases of Russian crude for April delivery and are expected to extend the moratorium, a shift that could ease trade negotiations between New Delhi and Washington, according to industry and trading sources.
The move by India’s largest fuel producers comes after the United States and India announced a framework Friday for a bilateral trade agreement they aim to finalize by March.
The deal would reduce tariffs and expand economic ties between the two nations, though neither government explicitly linked the Russian oil issue to the trade talks. Indian Oil Corporation, Bharat Petroleum and Reliance Industries are no longer accepting trader offers for Russian crude loading in March and April, a trader who approached the companies said. While these refiners have existing commitments for Russian oil arrivals in March, most other Indian buyers have ceased purchases altogether, refining sources confirmed. The three state-run and private refiners did not respond to requests for comment. India’s oil ministry also declined to address the matter. Trade Minister Piyush Goyal on Saturday redirected questions about Russian crude to the foreign ministry.
A foreign ministry spokesperson said diversifying energy sources in response to market conditions and international developments remains central to India’s strategy for ensuring energy security in the world’s most populous country. The statement did not specify whether Russian crude would be excluded from future procurement.
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President Donald Trump on Friday cancelled 25 percent tariffs on Indian goods that had been imposed over New Delhi’s continued imports of Russian oil. Trump said India had “committed to stop directly or indirectly” purchasing Russian crude, though the U.S.-India joint statement on the trade framework made no mention of Russian oil. Indian authorities have not publicly announced plans to halt Russian crude imports or confirmed any such commitment to Washington. The discrepancy between Trump’s assertion and New Delhi’s silence has raised questions about the terms discussed privately between the two governments. India emerged as the leading buyer of discounted Russian seaborne crude following Moscow’s invasion of Ukraine in February 2022. Western nations, which imposed sanctions targeting Russia’s energy sector to limit revenue for its war effort, criticized New Delhi’s surge in purchases. India defended the imports as necessary to manage domestic fuel costs and maintain energy security.
Russian crude accounted for a negligible share of India’s oil imports before the war. By mid-2025, volumes peaked above 2 million barrels per day, making India Russia’s largest customer by sea. Indian refiners capitalized on steep discounts as European buyers withdrew under sanctions pressure and G7-imposed price caps. Those volumes have since declined sharply. December imports fell to their lowest level in two years, according to data from trade and industry sources. India, the world’s third-largest oil consumer and importer, has been replacing Russian barrels with crude from the Middle East, Africa and South America.
Sources said last month that Indian refiners were preparing to reduce Russian crude intake below 1 million barrels per day by March, with further cuts expected to bring volumes to between 500,000 and 600,000 barrels daily. That compares with an average of 1.7 million barrels per day in 2024. The reduction reflects a combination of factors, including pressure from Washington, logistical challenges tied to insurance and shipping under Western sanctions, and shifting price dynamics that have eroded the discounts Russian crude once offered.
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India’s dependence on imported oil, which supplies more than 85 percent of domestic consumption, makes procurement strategy a sensitive issue.
However, the prospect of a trade agreement with the United States, India’s largest export destination, appears to have influenced recent procurement decisions. Tariff relief and expanded market access could offer significant economic benefits, particularly for India’s technology, pharmaceutical and manufacturing sectors. The U.S.-India trade framework announced Friday includes commitments to lower tariffs on goods and services, enhance intellectual property protections, and deepen cooperation in critical minerals and defense manufacturing. Both governments described the agreement as a step toward a more comprehensive economic partnership. Washington has sought to leverage trade policy to pressure countries maintaining energy ties with Russia. Similar tactics have been applied to China, Turkey and other nations importing Russian crude or refined products. India’s pullback, if sustained, would represent a notable diplomatic and economic shift.
European and Japanese refiners largely ceased Russian crude purchases in 2022 following sanctions and voluntary embargoes. China, by contrast, has increased intake and now rivals India as Moscow’s top customer. Chinese refiners continue to benefit from discounted barrels, offsetting some of the revenue losses Russia incurred from losing European markets.
Sanctions enforcement has complicated Russian oil trade, with buyers navigating restrictions on tankers, insurance and payments. India’s refiners have relied on intermediaries and tankers outside traditional Western insurance frameworks to maintain flows, practices that have drawn scrutiny from U.S. and European regulators.
The Biden administration refrained from directly penalizing Indian buyers, instead focusing diplomatic efforts on encouraging voluntary reductions. Trump’s decision to impose and then quickly lift tariffs on India marked a more confrontational approach, though the rapid reversal suggested flexibility in exchange for cooperation. Whether India’s current pause on Russian crude represents a temporary adjustment or a long-term policy shift remains unclear. Refiners could resume purchases if discounts widen again or if trade negotiations stall. New Delhi has not codified any ban, leaving room for market-driven changes.
Russian oil exports remain heavily reliant on Asian demand, with India and China absorbing the majority of seaborne volumes. Any sustained reduction in Indian intake would pressure Moscow to offer deeper discounts or seek alternative buyers, further straining export revenues already diminished by sanctions and price caps. India’s oil ministry and refiners have not disclosed specific procurement plans for the coming months.
