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India’s state-run oil firms suspend Russian crude purchases

US pressure and shrinking discounts have prompted India’s state-run refiners to halt Russian crude imports, signalling a shift in a key Moscow energy partnership.

News Arena Network - New Delhi - UPDATED: August 1, 2025, 06:26 PM - 2 min read

State-owned refiners have halted Russian crude imports as shrinking discounts and escalating US pressure alter the trajectory of India’s energy ties with Moscow. (Representative image)


India’s state-owned oil refiners have paused the procurement of Russian crude for the first time since the Ukraine conflict began, signalling a sharp shift in one of Moscow’s most lucrative energy partnerships. The move follows dwindling price advantages and growing pressure from Washington, according to reports citing sources familiar with India’s oil buying strategies.

 

Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), and Mangalore Refinery and Petrochemicals Ltd (MRPL), the principal state refiners, have reportedly not finalised any Russian oil purchases over the past week, the sources said.

 

While there has been no official confirmation from the government or the companies, the development comes as India faces renewed warnings from the United States against engaging with Russian energy exports.

 

India, the world’s third-largest crude oil importer, had emerged as Russia’s top seaborne buyer, accounting for an estimated 35 per cent of its total supplies. The partnership had allowed Indian refiners to access discounted Russian barrels since 2022, following sanctions imposed by the West after Moscow’s invasion of Ukraine.

 

However, those discounts, once as high as $30 per barrel, have now narrowed to their lowest margin in three years, undermining the economic case for continued imports.

Also read: India buying Russian oil not sole point of friction: Rubio

 

The pause in procurement also coincides with threats from US President Donald Trump, who warned on 14 July that countries continuing to purchase Russian oil could face 100 per cent tariffs unless Russia agrees to a peace deal with Ukraine. Trump further announced a 25 per cent tariff on Indian goods starting 1 August, while suggesting that more penalties could follow if India continues defence or energy ties with Russia.

 

“Negotiations are ongoing,” Trump said, adding that India must reconsider its strategic engagements.

 

Sources told Reuters that Indian refiners are now exploring alternative suppliers, including Middle Eastern grades such as Abu Dhabi’s Murban and oil from West African markets, to compensate for any potential shortfall.

 

Observers note that the sudden halt reflects a convergence of geopolitical and commercial pressures. “With global scrutiny increasing and economic incentives declining, India’s state refiners appear to be recalibrating their import sources,” a senior industry official said.

 

India has repeatedly defended its right to secure affordable energy sources, but the latest developments suggest a quiet shift in policy as global headwinds intensify.

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