Finance
Indian refiners shift oil strategy; trim Russian buys and turn to MidEast
Published by Global Banking & Finance Review®
Posted on January 21, 2026
3 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 21, 2026
3 min readLast updated: January 21, 2026
Indian refiners are reducing Russian oil imports and increasing Middle East purchases to improve US trade relations.
By Nidhi Verma and Siyi Liu
NEW DELHI/SINGAPORE, Jan 21 (Reuters) - Indian refiners are redrawing crude import strategies to shift away from top supplier Russia and boost imports from the Middle East, a move that could help New Delhi clinch a trade deal with the United States to lower tariffs.
India became the top buyer of discounted Russian seaborne crude after the 2022 outbreak of war in Ukraine, but the trade drew backlash from Western nations targeting Russia's energy sector with sanctions, saying oil revenues help it fund the war.
The shift away from Russia comes as Middle East producers, armed with higher output quotas from the Organization of the Petroleum Exporting Countries, are keeping global markets well-supplied, softening the impact on prices.
INDIA REFINERS SCALE BACK RUSSIAN BUYS
Indian refiners have begun scaling back Russian oil purchases following discussions at a government meeting to help accelerate a U.S.-India trade deal, three refining sources said.
The oil ministry's Petroleum Planning and Analysis Cell is collecting weekly data on refiners' purchases of Russia and U.S. crude, sources told Reuters this month.
In the latest change, state refiner Bharat Petroleum Corp awarded one-year tenders to buy Iraqi Basrah and Omani crude to trader Trafigura and is in the market to buy Murban oil from the United Arab Emirates under a separate tender, said the sources, who sought anonymity.
From April, Trafigura will supply four cargoes of Oman crude every quarter at 75 cents a barrel below Dubai quotes and one parcel of Basrah Medium at a discount of 40 cents a barrel to the grade's official selling price, said two traders.
BPCL and India's oil ministry did not respond to Reuters requests for comments.
DOUBLING OF IMPORT TARIFFS A PUNISHMENT FOR RUSSIA BUYS
The United States, already seeking to narrow its trade deficit with India, doubled import tariffs on Indian goods to 50% last year to punish it for heavy purchases of Russian oil.
State-run Hindustan Petroleum, Mangalore Refinery and Petrochemicals and private refiners HPCL-Mittal Energy Ltd have already stopped buying Russian oil.
India's Russian oil imports fell to their lowest in two years in December, while OPEC's share of imports hit an 11-month high, trade data showed.
Apart from the Middle East, Indian refiners have also increased purchases from regions such as Africa and South America.[CRU/TENDA]
Indian refiners have also boosted purchases of U.S. oil to partly replace Russian oil and narrow the trade deficit with Washington, while also scouting for Venezuelan oil.
(Reporting by Nidhi Verma in New Delhi and Siyi Liu, Florence Tan in Singapore; Editing by Tom Hogue, Thomas Derpinghaus and Clarence Fernandez)
Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. It is a primary source of energy and raw material for various products.
Seaborne crude oil refers to oil that is transported by sea, typically in large tankers. It is a significant part of global oil trade.
Explore more articles in the Finance category
