India Cuts Back On Russian Oil Purchases Amid Push For Trade Pact With US

India's oil purchasing strategy appears to be shifting as state-run and private refiners pull back from buying Russian crude, signalling a move that could smooth the path for a broader trade agreement with the United States.

Industry sources say the cautious approach is already visible in procurement plans for the coming months, even as New Delhi keeps its official position measured.

Refiners Step Back From Russian Crude

Several major refiners, including Indian Oil Corporation, Bharat Petroleum, and Reliance Industries, are reportedly declining offers from traders for Russian oil scheduled to load in March and April. While some cargoes had already been lined up for March delivery, most refiners have now paused fresh purchases, according to refining and trade insiders.

Neither the companies nor the oil ministry responded to queries on the development. Meanwhile, India's trade minister redirected questions on Russian oil to the foreign ministry.

A spokesperson from the ministry stated, "Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy" to ensure energy security for the world's most populous nation.

Trade Pact Momentum With Washington

The development comes as India and the US edge closer to a formal trade framework that aims to reduce tariffs and expand economic cooperation, with both sides targeting a conclusion by March.

Although the joint statement did not specifically refer to Russian oil, Donald Trump recently withdrew a 25 per cent tariff on Indian goods that had been imposed over Moscow-linked purchases. He said the rollback followed New Delhi's "committed to stop directly or indirectly" importing Russian oil. India, however, has not officially declared any plan to end such imports.

The country emerged as the largest buyer of discounted Russian seaborne crude after the Russian invasion of Ukraine in 2022, when Western sanctions targeted Moscow's energy revenues.

Import Levels Likely To Shrink Further

Sources indicated that India had been preparing to reduce Russian oil imports to under 1 million barrels per day by March, with volumes potentially dropping to between 500,000 and 600,000 barrels per day. This marks a steep fall from the average 1.7 million barrels per day recorded last year, with imports briefly crossing 2 million barrels per day in mid-2025.

Data from trade and industry trackers also show that shipments fell to a two-year low in December. As the world's third-largest oil consumer, India has increasingly sourced crude from the Middle East, Africa, and South America while scaling back reliance on Russian supplies.

Nayara's Unique Position Amid Sanctions

One exception remains Nayara Energy, a Russia-backed private refiner that depends entirely on Russian crude to operate its 400,000-barrel-per-day facility. Market sources suggest the company may continue receiving supplies because alternative sellers stepped away after the European Union sanctioned the refiner in July.

Even so, Nayara is not expected to import Russian crude in April due to a planned month-long maintenance shutdown. The company did not respond to an emailed request for comment.

Industry insiders add that Indian refiners could revisit Russian purchases if directed by the government. US officials are set to monitor the situation closely, with the possibility of tariffs returning should India resume large-scale procurement from Moscow.