Wanting both? India imports Russian oil while seeking U.S. "tariff reduction"

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India is caught in a delicate geo-economic game: on one hand, the country is trying to persuade the United States to lift tariffs imposed due to imports of Russian crude oil; on the other hand, while private refiners are pulling back due to sanction risks, India's state-owned refiners continue to procure Russian oil to meet domestic demand.

According to a Xinhua News Agency report on August 7, 2025, U.S. President Trump signed an executive order on the 6th, citing India's "direct or indirect import of Russian oil," to impose an additional 25% tariff on Indian exports to the U.S. In response, the Indian side stated that the U.S. move to impose tariffs on India is "unfair, unjust, and unreasonable," and India will "take all necessary actions" to safeguard its national interests.

Against the backdrop of the Trump administration warning of possible further tariffs, India's state-owned refining companies have not stopped purchasing forward Russian crude oil. According to media citing analysts, although India's overall import volume of Russian oil has recently declined, this is mainly due to private giants such as Reliance Industries reducing procurement to avoid sanctions, while state-owned companies’ demand remains robust—not just filling in some gaps, but is even expected to drive a slight increase in imports in January.

This strategy puts India in a complex position during negotiations with the U.S. Senator Lindsay Graham revealed that Indian Ambassador to the U.S. Vinay Mohan Kwatra has requested him to lobby President Trump to lift the tariffs imposed on India since last year, citing that India has already reduced purchases of Russian oil. However, Trump told reporters aboard Air Force One on Sunday that if India cannot effectively curb its purchases of Russian oil, the U.S. may further increase tariffs on India.

State-Owned Refiners Maintain Purchasing Power

Although India's overall Russian oil demand declined in December due to U.S. sanctions on Russian oil companies Lukoil and Rosneft, state-owned refiners (PSU) remain active.

Kpler senior crude oil analyst Muyu Xu noted that Indian state-owned companies such as Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) are still purchasing Russian crude for future delivery through non-sanctioned suppliers. This behavior has partially offset the market gap left by private refiners withdrawing.

Rystad Energy's Senior Vice President for Commodity Markets, Pankaj Srivastava, analyzed that despite the overall decrease, state-owned refineries' intake of Russian oil remains resilient. This highlights that the market has not collapsed, but rather demand has been redistributed. Srivastava emphasized that driven by domestic fuel demand and price economics, the trend for public sector refiners to process Russian oil has even slightly increased.

India’s Energy Minister Hardeep Singh Puri previously told the media that as long as the terms are favorable, India will source oil from anywhere.

Private Refiners’ Retreat Causes Volume Fluctuations

Market data shows that India’s total imports of Russian crude are indeed declining, but this is mainly attributed to risk-averse behavior in the private sector.

Analysts point out that the decline in Russian oil imports in December mainly resulted from Reliance Industries, owned by Mukesh Ambani, cutting back on procurement. The company had previously been a major importer of Russian oil, but began sharply reducing purchases even before the U.S. formally sanctioned Lukoil and Rosneft in late November last year.

Kpler data shows that India’s Russian crude imports in December decreased by 595,000 barrels/day month-on-month, down to 1.24 million barrels/day, the lowest since December 2022. Rystad Energy estimates that since November, India's Russian crude imports have decreased by about 300,000 barrels/day month-on-month to 1.7 million barrels/day.

Currently, India is facing ongoing pressure from the United States. Market forecasts suggest India’s Russian oil imports may rebound. Rystad Energy expects that India’s Russian crude imports will see a “moderate recovery” in January, rising to 1.8 million barrels/day.

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