India Starts Buying US Oil Instead Of Russian Oil
- 1.08.2025, 21:21
New Delhi has rejected oil from Russian Federation after Trump's threats.
India's largest refiner has bought millions of barrels of oil from the United States and the United Arab Emirates amid mounting pressure from Washington and European countries unhappy with continued Russian oil imports. This was reported by Bloomberg citing sources among traders. According to the agency, state-owned Indian Oil Corporation bought at least 5 million barrels of U.S. crude and also received 2 million barrels of crude from the UAE.
"We see India's increased activity in the market as a step toward diversifying supplies and reducing dependence on Russian volumes," Livia Gallarati, head of global crude supply at consultancy Energy Aspects, told Bloomberg. She stressed that despite lingering skepticism over whether U.S. President Donald Trump will follow through on his threats to impose additional duties on Russian energy buyers, physical players are unlikely to risk buying oil from Russia, especially amid high prices.
This week (July 28-Aug. 3), Indian Oil Corporation held several consecutive crude tenders, which traders called atypical for the company and saw as a sign of increased demand for crude. The company also bought 4 million barrels of West African crude and a shipment of Murban grade from the UAE.
Gallarati said buying U.S. crude instead of Murban for delivery in November gives Indian refineries the opportunity to earn $3 more per barrel. "India's strong buying activity in the Atlantic Basin is clearly supporting [global] oil prices," she added.
In the past two weeks, Indian refineries have been in the international spotlight following sharp criticism from the European Union and the United States for continuing to buy Russian oil, which the West says is helping to finance Russia's war against Ukraine.
Donald Trump earlier approved 25 percent tariffs on imports from India and threatened to impose 100 percent duties against countries that continue to buy Russian oil if Russia does not end military action in Ukraine by August 8.
After the war in Ukraine began, India became the world's largest buyer of Russian oil: in a few years, the country increased its purchases from almost zero to a third of all imports, prioritizing Urals grade to the detriment of traditional suppliers from the Middle East and Africa.
On July 14, Trump threatened to impose 100 percent duties on countries buying Russian energy resources if the war in Ukraine does not end within 50 days. Later, on July 29, he toughened the terms, reducing the deadline to 10 days - until August 8 - explaining that he was "deeply disappointed" in the actions of Vladimir Putin, who continues to escalate the conflict despite U.S. efforts.
With these statements as a backdrop, four state-owned Indian oil refineries, which account for more than 60 percent of the country's refining capacity, stopped buying Russian oil. These are Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd, which had previously been actively working with Russian crude.