India has not halted importing oil from Russia even after threats of tariffs from the US President, opting to make decisions based solely on economic considerations, according to AS Sahney, Chairman of Indian Oil Corporation (IOC), the country's largest oil firm.
Barrels of Russian crude like Urals can differ from month to month based on available discounts. Earlier, the discounts had narrowed up to USD 40 per barrel, but they closed in at only USD 1.5 towards the end of last month, resulting in reduced imports. The discounts have increased again recently to about USD 2.70. Nevertheless, India's resolve to keep importing Russian oil continues undeterred.
Since 2022, India has emerged as Russia's biggest buyer of oil after Western countries boycotted Russian supplies and levied sanctions on Moscow for its invasion of Ukraine.
Sahney underlined that IOC and other refiners place crude buying decisions with Russia on purely economic considerations without any instructions to reduce or ramp up imports on account of US tariffs. "There is no pause," he said, adding that Russian oil shipments continued throughout July and into August.
We keep on purchasing, solely on economic grounds, i.e., if the price and specifications of the crude are logical in our processing plan, we purchase," Sahney informed the media personnel.
He further said, "No extra effort is being put in to either raise or lower [the import levels]. We are purchasing crude according to economic grounds.
In the April-June period, imports from Russia accounted for 22-23% of all crude processed at IOC refineries.
US President Donald Trump last week said he was imposing an extra 25% tariff on Indian imports, raising the total duty to 50%, in response to India's continued importation of Russian oil. The tariffs could affect up to USD 40 billion of non-exempt Indian exports to the US, and there have been speculations about suspending or cutting Russian oil imports.
There are no sanctions on Russian crude," Sahney said. "India has not done anything that breaks any sanctions.
At the same time, Bharat Petroleum Corporation Ltd (BPCL) Director (Finance) Vetsa Ramakrishna Gupta announced in an investor call that the reduction of discounts to USD 1.5 per barrel resulted in reduced imports last month. Russian oil accounted for 34% of BPCL's crude intake during the first quarter, and the company hopes to keep a 30-35% share, if sanctions are not present.
Prior to February 2022, Russian crude accounted for less than 1% of India's overall oil imports. Following the invasion of Ukraine, Western nations avoided Russian energy, making Indian buyers the recipients of cheaper crude in relation to global standards. India took advantage of the deal, deepening dependence on Russian oil to supply domestic energy needs. Russian crude now accounts for approximately 30% of India's needs.
Sahney continued to assert that the import of Russian crude had never been banned and India still bought according to economics. "Such buying will go on unless sanctions are imposed," he affirmed. "We have not received any instruction [from the government] to either raise or lower purchase. We are doing as usual."
Responding to reports that refiners might be instructed to increase US imports in a bid to placate Trump, Sahney explained, "Neither are we asked to buy more nor are we asked to buy less from US or any other source. Economic considerations govern our actions."
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