Russia’s President Vladimir Putin (R) speaks with India’s Prime Minister Narendra Modi (L) during a visit to the shipyard Zvezda, as Rosneft Russian oil giant chief Igor Sechin (C) accompanies them, outside the far-eastern Russian port of Vladivostok on September 4, 2019, ahead of the start of the Eastern Economic Forum hosted by Russia.
Alexander Nemenov | Afp | Getty Images
India will keep purchasing oil from Russia despite U.S. President Donald Trump’s threats of penalties, two Indian government sources told Reuters on Saturday, not wishing to be identified due to the sensitivity of the matter.
On top of a new 25% tariff on India’s exports to the U.S., Trump indicated in a Truth Social post last month that India would face additional penalties for purchases of Russian arms and oil. On Friday, Trump told reporters he had heard that India would no longer be buying oil from Russia.
But the sources said there would be no immediate changes.
“These are long-term oil contracts,” one of the sources said. “It is not so simple to just stop buying overnight.”
Justifying India’s oil purchases from Russia, a second source said India’s imports of Russian grades had helped avoid a global surge in oil prices, which have remained subdued despite Western curbs on the Russian oil sector.
Unlike Iranian and Venezuelan oil, Russian crude is not subject to direct sanctions, and India is buying it below the current price cap fixed by the European Union, the source said.
The New York Times also quoted two unnamed senior Indian officials on Saturday as saying there had been no change in Indian government policy. Indian government authorities did not respond to Reuters’ request for official comment on its oil purchasing intentions.
However, during a regular press briefing on Friday, foreign ministry spokesperson Randhir Jaiswal said India has a “steady and time-tested partnership” with Russia.
“On our energy sourcing requirements … we look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances,” he said.
The White House did not immediately respond to requests for comment.
India’s top supplier
Trump, who has made ending Russia’s war in Ukraine a priority of his administration since returning to office this year, has expressed growing impatience with Russian President Vladimir Putin in recent weeks.
He has threatened 100% tariffs on U.S. imports from countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine.
Russia is the leading supplier to India, the world’s third-largest oil importer and consumer, accounting for about 35% of its overall supplies.
India imported about 1.75 million barrels per day of Russian oil from January to June this year, up 1% from a year ago, according to data provided to Reuters by sources.
Oil storage tanks in Tuapse, Russia, March 22, 2020. The G7 price cap on Russian oil shipments is cutting the revenue that Moscow has available to support its invasion of Ukraine, and the mechanism’s effectiveness is helped by the recent actions of Indian refiners, U.S. officials will say in New Delhi on Thursday, according to prepared remarks.
Bloomberg | Bloomberg | Getty Images
But while the Indian government may not be deterred by Trump’s threats, sources told Reuters this week that Indian state refiners stopped buying Russian oil after July discounts narrowed to their lowest since 2022 – when sanctions were first imposed on Moscow – due to lower Russian exports and steady demand.
Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd have not sought Russian crude in the past week or so, four sources told Reuters.
Nayara Energy – a refinery majority-owned by Russian entities, including oil major Rosneft, and major buyer of Russian oil – was recently sanctioned by the EU.
Nayara’s chief executive resigned following the sanctions, and three vessels laden with oil products from Nayara Energy have yet to discharge their cargoes, hindered by the new EU sanctions, Reuters reported last week.