The bitter feud over the pipeline pitted Hungary’s nationalist premier Viktor Orban against Ukrainian President Volodymyr Zelenskyy, stalling the vitally needed funds for Kyiv. File
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U.S. Secretary of the Treasury Scott Bessent. File
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The Russian government have said they haven’t received any information from India indicating that they plan to stop buying Russian oil, after US President Donald Trump claimed India agreed to do so as part of a trade deal with Washington. “So far, we haven’t heard any statements from New Delhi on this matter,” Kremlin spokesman Dmitry Peskov told reporters on Tuesday. 

Trump on Monday announced on his social media platform ‘Truth Social’ that Prime Minister Narendra Modi promised to halt oil purchases from Russia in exchange for reduced US tariffs. 

Reuters quoted the Kremlin saying, “Our strategic partnership with India is most important.” Peskov added that there has been no official communication suggesting any change in energy cooperation and spoke about Moscow’s intent to continue developing ties with India.

“We respect bilateral US-Indian relations,” Peskov said. “But we attach no less importance to the development of an advanced strategic partnership between Russia and India. This is the most important thing for us, and we intend to further develop our bilateral relations with Delhi.” 

US-India Trade Deal 

On Monday, Trump announced a trade deal with India that cuts US tariffs on Indian goods to 18% from 50%, in exchange for India putting a stop to Russian oil purchases and reducing trade barriers. Trump said India would now buy oil from the US and potentially Venezuela. 

“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25 per cent to 18 per cent,” Trump posted. 

India’s History With Russian Oil 

India imports around 1.5 million barrels of Russian crude per day, over one-third of its total imports. India is the second-largest buyer of Russian oil. The Indian Government has defended these imports, calling them essential for the country’s energy security. 

Historically, India’s relationship with Russia focused more on defence than energy. After the Russian invasion of Ukraine, India increased purchases of discounted Russian oil, helping its energy supply while supporting Russia’s economy. 

In December 2025, Russian President Vladimir Putin said during a visit to New Delhi that Russia was ready to continue “uninterrupted shipments” of fuel to India despite US pressure. 

Will India Now Buy Oil From Venezuela? 

Top Indian government sources also said the trade deal does not compromise the interests of Indian farmers. India will continue buying crude oil from countries not under sanctions. Sensitive sectors like soybean and dairy will remain protected. 

ALSO READ | India-US Trade Deal: From Laptops To Dairy – Here’s What Gets Cheaper In India

It is not clear if ​Reliance will ⁠continue to buy Russian oil beyond March. File
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The Nifty, Sensex ended the session lower due to renewed concerns over potential U.S. tariff hikes amid widespread selling pressure in global markets. File
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President Donald Trump. File
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U.S. President Donald Trump. File
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India’s purchase of Russian oil has risen to 2 million barrels per day (bpd) in August, as refiners continue to prioritise economic considerations in their sourcing decisions.

As much as 38% out of an estimated 5.2 million barrels per day of crude oil imported in the first half of August came from Russia, according to global real-time data and analytics provider Kpler.

Also read | Will India cave in to U.S. pressure on Russian oil? | Explained

Imports from Russia at 2 million bpd were up from 1.6 million bpd in July. The increase in Russian flow was at the cost of purchases from Iraq, which declined to 730,000 bpd in August, and Saudi Arabia which fell to 526,000 bpd from 700,000 bpd last month.

The U.S. was the fifth largest supplier at 264,000 bpd, according to Kpler.

“Russian crude imports into India have so far remained resilient in August, even after the Trump administration’s tariff announcement in late July 2025,” said Sumit Ritolia, Lead Research Analyst (Refining&Modeling) at Kpler. “But the stability we’re seeing now is mostly a result of timing – August cargoes were locked in back in June and early July, well before any policy shifts.” What’s showing up in the data today reflects decisions made weeks ago, he said, adding any real adjustment in flows – whether due to tariffs, payment issues, or shipping friction – will only start becoming visible from late September through October arrivals.

He noted that there’s been no government directive to cut Russian volumes. “So from a policy standpoint, it’s business as usual”.

Arvinder Singh Sahney, chairman of Indian Oil Corporation — India’s largest oil firm —- too said the government has not given any instruction to go slow on purchases from Moscow in the aftermath of President Donald Trump’s decision to slap an additional 25 per cent tariff on US imports from India — raising the overall duty to 50 per cent — as a penalty for the country’s continued imports of Russian oil.

“Neither we are being told to buy nor told not to buy,” he said. “We are not making extra effort to either increase or decrease the share of Russian crude.” Russian oil accounted for about 22% of the crude processed by IOC in April-June and the volumes are expected to remain the same in the near future, he said.

Separately, Bharat Petroleum Corporation Ltd (BPCL) Director (Finance) Vetsa Ramakrishna Gupta on an investor call said imports from Russia had declined last month from 34 per cent of overall imports in June quarter, as discounts on it had narrowed to $1.5 per barrel.

“As long as there is no new sanction on Russian oil, our procurement strategy will be 30-35% of Russian crude for the remaining year,” he had said.

India, the world’s third-largest oil consumer and importer, had swiftly substituted market-priced oil with discounted Russian crude following Western sanctions on Moscow after its invasion of Ukraine in February 2022.

Russian oil, which accounted for less than 0.2% of India’s imports before the war, now makes up 35-40% of the country’s crude intake. The discounts however have narrowed from a high of $40 per barrel to just $1.5 last month.

Discounts this month have risen to over $2 per barrel.

Ritolia said Indian refiners are watching the situation closely. “There’s growing interest in sourcing more barrels from the US, West Africa, and Latin America, not necessarily because they are walking away from Russian supply, but to hedge against possible disruptions. It’s a shift in mindset – from margin maximization to energy security and logistical risk management.”

He however hastened to add that buying more cargoes from elsewhere in the world does not mean Indian refiners are replacing Russian barrels. “Crude buying is a continuous, complex process-driven by refinery configuration, grade compatibility, and economics. Indian refiners still need to source 60–65% of their crude from non-Russian suppliers, and that mix hasn’t suddenly changed. What we’re seeing is added flexibility, not a deliberate pivot. Until there’s a clear policy change or sustained shift in trade economics, Russian flows remain part of India’s crude basket and talk of replacement is premature.” Sahney said at no time was import of crude oil from Russia sanctioned and so India continued to purchase keeping in mind economic considerations.

“Such purchases will continue unless sanctions are imposed,” he said. “We have not got any instruction (from the government) to either increase or decrease purchase. We are doing business as usual.”

About talk of refiners being asked to increase purchases from the U.S. in a bid to placate Trump, IOC Chairman said, “Neither are we being told to buy more nor are we told to buy less from U.S. or any other destination. Economic considerations dictate our actions.”

Published – August 15, 2025 02:29 pm IST

FILE PHOTO: An aerial view shows the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia June 13, 2022. Picture taken with a drone. REUTERS/Tatiana Meel/File Photo
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Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to severe new U.S. sanctions on Russian producers and tankers that are designed to curb the revenues of the world’s second-largest oil exporter.

U.S. President Joe Biden’s administration imposed its broadest package of sanctions so far targeting Russia’s oil and gas revenues on Friday (January 10, 2025) to give Kyiv and Donald Trump’s incoming team leverage to reach a deal for peace in Ukraine.

The incoming Mr. Trump administration has not yet responded to requests for comment.

The U.S. Treasury imposed sanctions on Russian oil producers Gazprom Neft and Surgutneftegaz, as well as on 183 vessels that form part of a shadow fleet that has so far allowed Russia to skirt sanctions to get its oil to global markets.

According to Morgan Stanley, which cited data from tanker tracker Vortexa, the tankers subject to the latest sanctions carried around 1.5 million barrels of crude oil per day in 2024. That equates to around 1.4% of global oil demand.

Many of them have been used to ship oil to India and China as Western sanctions and a price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. In addition, some tankers have shipped oil from Iran, which is also under sanctions.

Oil prices have jumped. Global benchmark Brent crude rose on Monday (January 14, 2025) above $81 a barrel to its highest since August and the premium of prompt crude to that for delivery six months later has risen to its highest since April, implying traders expect supplies to remain tight.

The Kremlin said the sanctions risked destabilising global markets, and Moscow would seek to counter them.

“It is clear that the United States will continue to try to undermine the positions of our companies in non-competitive ways, but we expect that we will be able to counteract this,” Kremlin spokesman Dmitry Peskov said on Monday (January 14, 2025).

Washington also imposed sanctions on top Russian ship insurer Ingosstrakh and another insurance provider Alphastrakhovanie.

It was unclear what would happen to the vessels whose insurance was unknown in the event of any environmental disaster and what mechanisms would be in place for clean-up costs or for insurance claims.

Adaptation?

China has reiterated its opposition to unilateral U.S. sanctions.

Analysts said the new sanctions were likely to reduce Russian oil exports in the short term, but Russia could adapt by using the vessels in its shadow fleet that are still not under sanctions.

Analysts also said the true size of Russia’s shadow fleet was unknown, but it was estimated to comprise close to 600 tankers.

Since the new sanctions, at least 65 oil tankers have dropped anchor at multiple locations, including off the coasts of China and Russia, ship tracking data showed.

Five of those were stationary off Chinese ports and a further seven dropped anchor off Singapore, with others halting near Russia in the Baltic Sea and the Far East.

Shandong Port Group banned tankers under U.S. sanctions from calling at its ports before Washington’s announcement on Friday (January 10, 2025).

The severity of the new measures has for now driven Chinese refiners back to sellers of oil that is not restricted, pushing up the spot markets for some regional crudes, as well as adding upward momentum on the global oil market.

“Chinese refiner Yulong Petrochemical has previously bought Russian ESPO Blend crude, but over the weekend bought 4 million barrels of Abu Dhabi’s Upper Zakum crude loading in February and March from Totsa,” the trading arm of French energy major TotalEnergies, traders said.

In recent weeks, it has also purchased Angolan and Brazilian crude, traders said, and is in talks to buy more oil from West Africa as well as Canada.

China’s Unipec on Friday (January 10, 2025) also booked four very large crude carriers, which can carry up to 2 million barrels of crude, from the Middle East, figures from data intelligence firm Kpler showed.

The numerous sources Reuters spoke to declined to be named as they were not authorised to speak to media. Yulong and Totsa typically do not comment on commercial deals.

Two-month transition period

Currently, over 60% of Russia’s seaborne oil exports go to India, the world’s third-largest oil importer and consumer.

Although Indian refiners have stopped dealing with oil tankers and entities under U.S. sanctions, the country does not expect disruption to Russian crude supplies during a two-month transition period, a government source said on Monday (January 14, 2025).

India will allow Russian oil cargoes booked before Jan. 10 to discharge at ports, the source said, adding that Russia could also offer deeper discounts to India to meet a $60 a barrel price cap imposed by Group of Seven countries in 2022. Shipments below that level can use western tankers and insurance.

Moscow-based Sinara Bank also said temporary discounts were possible for Russia’s flagship Urals oil blend to dated Brent.

Traders said Indian refiners, which bought spot Middle East crude last week before the sanctions were announced, were seeking more cargoes.

India’s Bharat Petroleum Corp Ltd bought 2 million barrels of February-loading Oman crude from Totsa via a tender last week, two people familiar with the matter said.