NEW DELHI: Indian refiners need a wind-down period to complete Russian oil deals before halting imports from the country, but so far there has been no order from the government to halt such imports, two refiners said.
US President Donald Trump on Monday announced a trade deal with Indian Prime Minister Narendra Modi that includes a halt to India’s oil purchases from Russia.
Indian companies have already booked cargo to be loaded in February and arrive in March, so a period of relaxation will be needed to meet existing commitments, the official said. They spoke on condition of anonymity because they were not authorized to speak to the media.
The trade deal with India would see U.S. tariffs on Indian goods cut from 50% to 18% in exchange for India lowering trade barriers and halting purchases of Russian crude oil. Instead, it will buy oil from the United States and potentially Venezuela.
After the outbreak of war in Ukraine in 2022, India became the largest buyer of discounted Russian offshore crude, sparking a backlash among Western countries that targeted Russia’s energy sector with sanctions.
The United States wants to suppress Russian oil revenues to make it harder for Russia to finance its war.
President Trump said of his meeting with Prime Minister Modi, “We talked about a lot of things, including trade and ending the war with Russia and Ukraine.” “He agreed to stop buying Russian oil and buy more oil from the United States and possibly Venezuela.”
Prime Minister Modi posted on social media that he was satisfied with the tariff reduction, but did not mention stopping purchases of Russian crude oil.
Reuters reported last week that the United States told Delhi it may soon resume purchasing Venezuelan crude oil to replace imports of Russian crude. President Trump said on Saturday that India would buy oil from Venezuela.
India’s Oil Minister Hardeep Singh Puri said last month that India is diversifying its crude oil supply sources as oil imports from Russia decline.
India’s Russian oil imports fell to their lowest level in two years in December, while OPEC’s share of India’s imports rose to an 11-month high, according to data from trade sources.
Indian refiners have begun scaling back purchases of Russian oil and increasing purchases of crude from countries in the Middle East, Africa and South America, refining officials said last month, following discussions at a government meeting on accelerating the U.S.-India trade deal. (Reporting by Nidhi Verma; Editing by Edmund Klamann)
