Russian Oil: Crude Oil Supplies from Russia to Continue for Now, but Efforts to Reduce Imports Begin

New Delhi: Following the removal of punitive tariffs by the US, India is likely to gradually reduce its purchases of crude oil from Russia. However, these imports will not stop completely for now due to limited options for oil refineries like Nayara Energy.

Sources familiar with the matter said that oil refineries have not received any formal instructions to stop buying from Russia. However, they have been informally advised to reduce purchases from Moscow. According to sources, most refineries will honor purchase commitments made before this announcement (orders typically placed 6-8 weeks in advance), but no new orders will be placed thereafter.

Gradual Cessation of Russian Oil Purchases
Hindustan Petroleum Corporation Ltd., Mangalore Refinery and Petrochemicals Ltd., and HPCL-Mittal Energy Ltd. stopped buying oil from Russia last year immediately after the US imposed sanctions on major Russian exporters. Now, Indian Oil Corporation and Bharat Petroleum Corporation Ltd. will also gradually cease their purchases.

Reliance Industries Ltd., India’s largest buyer, may also stop purchases after receiving a consignment of 150,000 barrels in a few weeks. The only exception to this rule might be Nayara Energy. The Ministry of Petroleum has declined to comment on the issue. The Ministry of Commerce and the Ministry of External Affairs have also not directly responded to inquiries regarding commitments related to Russian oil purchases.

25% Tariff if Russian Oil is Purchased: US
Donald Trump had said that in exchange for India stopping its purchases of Russian oil and reducing trade barriers, US tariffs on Indian products would be reduced from 50 percent to 18 percent. The order also states that if the US Commerce Secretary determines that India has resumed importing Russian oil, then a 25 percent tariff and other measures against India may be considered again.