India plans to continue its purchase of Russian oil, despite U.S. warnings of potential penalties, according to Indian government sources familiar with the matter.
India has decided to maintain its oil trade with Russia despite threats of penalties from U.S. President Donald Trump. Two unnamed sources from the Indian government revealed that the country will proceed with its long-term oil contracts with Russia, indicating the complexity of abruptly stopping oil imports.
Last month, President Trump, through a Truth Social post, suggested that India might face additional penalties for its continued purchases of Russian arms and oil. On August 1, Trump mentioned hearing that India would cease buying oil from Russia. However, The New York Times reported on August 2 that senior Indian officials confirmed there has been no change in India’s policy towards oil imports from Russia. One official clarified that no directives were given to oil companies to reduce imports from Russia.
According to Reuters, the nation’s state refiners momentarily halted buying Russian oil as the discounts diminished in July. Indian foreign ministry spokesperson Randhir Jaiswal addressed this during an August 1 briefing, stating that India evaluates its energy purchasing decisions based on availability, market offerings, and global circumstances. He emphasized India’s “steady and time-tested partnership” with Russia and noted that India’s international relations should not be viewed through the perspective of other countries.
The U.S. administration has not responded to requests for comments regarding the situation. Reports indicate that Indian state refiners, including Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp, and Mangalore Refinery Petrochemical Ltd, have not sought Russian crude oil in the past week due to shrinking discounts, a fact shared by sources aware of their procurement plans.
Amidst these tensions, it remains clear that Russia continues to serve as the top oil supplier to India, supplying about 35% of the country’s oil needs. President Trump recently threatened to impose 100% tariffs on countries purchasing Russian oil unless Russia reaches a peace agreement with Ukraine. From January to June this year, data shows India imported about 1.75 million barrels per day of Russian crude, marking a 1% increase from the previous year.
Nayara Energy, one of the major buyers of Russian oil, faced fresh challenges after being sanctioned by the European Union due to its majority ownership by Russian entities, including Rosneft. Following these sanctions, Nayara’s chief executive resigned and was replaced by Sergey Denisov, a seasoned veteran of the company. The sanctions have also hindered the discharge of oil carried by three vessels from Nayara Energy.
Despite the international pressure and sanctions, India’s ongoing reliance on Russian oil underlines the strategic and economic importance of maintaining its energy supply lines. The dynamics of global diplomacy and trade continue to influence India’s decision-making processes in the energy sector.