Indian Refiners Scale Back Russian Oil Purchases Amid Efforts to Advance U.S. Trade Agreement

Yugcharan / February 8, 2026

India’s major oil refiners are significantly reducing their purchases of Russian crude oil, a move that appears closely linked to New Delhi’s efforts to advance a broader trade agreement with the United States. Industry sources indicate that state-run and private refiners are largely avoiding new Russian oil contracts for deliveries scheduled in March and April, signalling a notable shift in India’s energy sourcing strategy after nearly four years of heavy reliance on discounted Russian supplies.

According to officials familiar with refinery procurement decisions, leading refiners such as Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Reliance Industries have declined fresh offers for Russian crude loading during the upcoming months. While some deliveries arranged earlier are still expected to arrive in March, most refiners have paused new commitments, and several have already diversified their crude baskets toward alternative suppliers.

Trade Talks and Strategic Signalling

The development comes shortly after India and the United States announced a framework for a potential bilateral trade deal aimed at reducing tariffs and expanding economic cooperation. The two sides have expressed hope of concluding the agreement by March, raising expectations of a reset in trade relations after recent frictions.

Although official statements on the trade framework have not directly linked energy imports to negotiations, comments from U.S. leadership have added a new dimension to the issue. U.S. President Donald Trump has publicly stated that India had committed to halting direct and indirect imports of Russian oil, a claim that New Delhi has not formally confirmed. However, the observed changes in refinery behaviour suggest that energy trade has become an important backdrop to broader diplomatic and commercial discussions.

Indian authorities have maintained a cautious public stance. Officials have reiterated that India’s energy policy is guided by the need to ensure affordability and security for the country’s large and growing population, while also taking into account evolving global conditions.

Shift from a Key Supplier

Russia emerged as India’s single largest supplier of crude oil after the outbreak of the Ukraine conflict in 2022, as Western sanctions redirected Russian exports toward Asian markets. India capitalised on this realignment, increasing imports of discounted Russian crude to reduce its overall energy import bill.

By mid-2025, India’s intake of Russian oil had crossed two million barrels per day at its peak, making the country the top buyer of Russian seaborne crude. Average imports during 2025 were estimated at around 1.7 million barrels per day, a substantial share of India’s total crude consumption.

However, industry data now point to a sharp reversal. Sources in the refining and shipping sectors indicate that India’s Russian oil imports have already fallen significantly in recent months, touching their lowest levels in nearly two years in December 2025. Projections suggest that volumes could drop below one million barrels per day by March, and potentially settle in the range of 500,000 to 600,000 barrels per day in the coming months if current trends continue.

Refiners Exercise Caution

Traders involved in crude negotiations say that refiners are reluctant to commit to Russian cargoes amid policy uncertainty and geopolitical sensitivities. Several refiners are reportedly waiting for clearer guidance from the government before making any fresh purchases from Russia.

“There is a clear pause in decision-making,” said a source involved in crude trading with Indian refiners. “Most buyers are choosing to stay on the sidelines unless there is a strong commercial or policy signal to resume.”

The oil ministry and major refiners have not issued public statements detailing their procurement plans. However, officials have indicated that any significant change in sourcing strategy would be aligned with national interests and broader diplomatic considerations.

Limited Exceptions and Operational Factors

One notable exception to the general trend is Nayara Energy, a private refiner with Russian backing that operates a 400,000-barrel-per-day refinery on India’s west coast. Nayara has traditionally relied almost entirely on Russian crude, partly due to limited access to alternative suppliers following sanctions imposed by the European Union last year.

Even so, Nayara is not expected to import Russian crude in April, as its refinery is scheduled for a month-long maintenance shutdown. Industry sources suggest that the company’s future procurement plans will depend on both operational needs and regulatory developments.

Diversification to Other Regions

As Russian volumes decline, Indian refiners are actively increasing purchases from the Middle East, Africa and South America. Supplies from countries such as Saudi Arabia, Iraq, the United Arab Emirates, Nigeria and Brazil have seen renewed interest, despite generally higher prices compared to discounted Russian crude.

This diversification reflects both commercial calculations and strategic hedging. By spreading sourcing across multiple regions, refiners aim to reduce exposure to geopolitical risks and potential trade repercussions.

Energy analysts note that while alternative supplies may raise input costs in the short term, refiners are balancing these costs against the broader economic and diplomatic benefits of stable trade relations with key partners.

Policy Signals and Monitoring

U.S. officials have indicated that India’s oil import behaviour will be closely monitored as part of the evolving trade relationship. Previous tariff measures imposed on Indian goods over energy purchases have been rolled back, with clear signals that they could be reinstated if Russian oil imports were to rise again.

Indian policymakers, for their part, have emphasised that diversification does not necessarily imply a permanent halt to Russian imports. Officials have stated that procurement decisions remain subject to market conditions, availability, and national energy security requirements.

Implications for Energy Security

India is the world’s third-largest consumer and importer of crude oil, meeting more than 85 per cent of its needs through imports. Any sustained change in sourcing patterns has implications not only for trade balances but also for inflation, fiscal stability and refinery margins.

Experts say that the current reduction in Russian oil purchases reflects a delicate balancing act between economic pragmatism and geopolitical alignment. “India is signalling flexibility without making irreversible commitments,” said an energy policy analyst. “The message appears to be that India is open to adjusting its energy mix in line with global realities, while retaining strategic autonomy.”

The Road Ahead

As trade negotiations with the United States progress and global energy markets remain volatile, India’s oil import strategy is likely to remain under close scrutiny. Refiners are expected to continue prioritising flexibility, while policymakers weigh the costs and benefits of different sourcing options.

For now, the slowdown in Russian oil purchases marks a significant shift from recent years and underscores how energy trade has become intertwined with diplomacy, trade policy and global politics. Whether this adjustment becomes a long-term realignment or a temporary recalibration will depend on how international negotiations and market dynamics unfold in the months ahead.