US Pressure Effect? Indian Government Oil Companies Stop Buying Russian Oil

New Delhi, 7 August – (www.deccanlive.com): Under growing pressure from the United States, India’s state-run oil companies have temporarily stopped buying Russian crude oil on the spot market. This move comes after the US imposed a 50% tariff on Indian imports due to India’s continued oil trade with Russia.

Recently, US President Donald Trump warned countries of 100% tariffs if they keep buying oil from Russia unless Russia agrees to a major peace deal with Ukraine. In response, companies like Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) have paused plans to buy Russia’s Urals-grade oil for October deliveries.

This decision will stay in place until the Indian central government gives further guidance. The Indian government has not officially banned oil imports from Russia but has asked companies to prepare for alternative non-Russian sources.

Trump has also doubled tariffs on all Indian exports to the US. Experts believe this is a direct response to India continuing its oil trade with Russia, as the US tries to pressure Moscow to end the war in Ukraine.

Indian oil companies usually buy oil on short-term cycles 1.5 to 2 months in advance. While a complete halt in Russian oil purchases is unlikely, the volume of purchases may go down.

As a result, oil from the US, the Middle East, and Africa may see increased demand. Traders suggest Russia may offer oil to China at even cheaper rates, though China does not usually prefer Urals-grade oil. This type of oil, mainly produced in Russia’s Ural and Volga regions, is heavy and high in sulfur, mostly used in making diesel and gasoline.

In fact, there was already a drop in Urals oil purchases for September due to high prices. After that, Indian companies bought oil from other regions through spot tenders. Private firms like Reliance Industries and Nayara Energy have not commented. Nayara is also facing production issues due to EU sanctions.

Urals crude continues to arrive in India, with tankers unloading at Indian ports, though some minor delays have occurred. Before the Ukraine war, India barely bought Russian oil. But after the war began, imports rose to over 2 million barrels per day.

According to R. Ramachandran, former refinery director at BPCL, “There may be some disruption in operations for a while, but supply and demand will balance out. If Russian oil becomes hard to get, Middle Eastern suppliers like Saudi Arabia and Iraq are good alternatives.”

This situation has affected global markets as well. Brent crude prices are currently stable at around \$67 per barrel after falling for five straight days. Traders are now watching closely to see how reduced Russian oil purchases by India could impact global oil supply chains.