Announcing the India-US trade deal on Monday evening (IST), US President Donald Trump said that Prime Minister Modi “agreed to stop buying Russian oil” and buy much more from the United States and potentially Venezuela.
While Prime Minister Modi, through an X post, did confirm that the US has reduced tariffs on majority of Indian imports to 18% from 50% previously, the Indian leader didn’t mention anything on Russian oil.
As part of the trade deal, the US has asked India to reduce its Russian oil purchases to zero while lifting the 25% ‘penalty’ tariff for buying Russian oil.
People familiar with the matter pointed out that there is no directive, as of Tuesday, from the Indian government to Indian oil companies asking them to halt the purchases of Russian oil.
Moreover, these decisions are taken by oil companies rather than by the government.
Further, some Indian refiners are also believed to have already booked Russian oil orders scheduled for deliveries in March.
Significantly, Nayara Energy, a Gujarat-based refinery owned 49.15% by Rosneft, has significantly increased its uptake of Russian oil since it came under EU sanctions last July. Its intake of Russian oil remained largely stable after Rosneft came under US Treasury sanctions last October.
In fact, Petroleum Minister Hardeep Singh Puri has stated quite a few times in the past that individual companies, be it in private or public sector, device their own strategies.
“I don’t make the strategy. The private sector buys from them (Russia). The public sector companies buy. Whether it’s 1.8 million barrels per day (bpd) or 1.5 million bpd or 1.3 million bpd or goes up, I am not going to get involved in that discussion,” Puri said at a press conference in New Delhi on 23 January, in response to a question about India’s Russian oil imports.
Like in December, Russia continued to remain India’s top crude supplier in January as well, according to data from Kpler and other sources in public domain.
India’s intake of Russian oil averaged around 1.1-1.2 million bpd in January, more or less comparable to December levels. At the same time, US oil imports to India increased to 218,400 bpd in January from 70,600 bpd in December, according to reported data.
India’s state-owned refiner Indian Oil Corporation Limited (IOCL) bought a near-high of 583,000 bpd of Russian oil in January, Nayara Energy sourced around 410,000 bpd and Bharat Petroleum Corporation Limited (BPCL) also bought nearly 183,000 bpd the same month, according to data from Kpler.
In the face of growing US pressure on India on the issue of Russian oil purchases, the Indian Ministry of External Affairs (MEA) has consistently stated that Delhi’s choices are shaped by “evolving dynamics of the global market and by the imperative to secure affordable energy for our 1.4 billion people through diverse sources”.