India ignores Trump threats over Russian oil

New Delhi: Despite US pressure and potential penalties, India has not directed its oil refiners to halt Russian crude purchases, prioritizing energy security and diplomatic ties. Refiners continue sourcing oil based on commercial factors, even as contingency plans for alternative sources are explored.

The decision comes as the Modi government navigates its energy security needs while managing diplomatic ties with Moscow and avoiding further tensions with US President Donald Trump.

According to sources who spoke on the condition of anonymity due to the sensitivity of the issue, no official decision has been made to stop imports from Russia. Both state-run and private refiners continue to source oil based on commercial considerations and are permitted to buy from suppliers of their choice.

The clarification follows Trump’s criticism of India for relying heavily on Russian energy and defence equipment. The US President imposed an unexpected 25 percent tariff on Indian goods and threatened further penalties due to India's close ties with Moscow.

Trump later told reporters that he had “heard” India would stop purchasing Russian oil, describing it as “a good step.” But the sources, who declined to be named due to the sensitivity of the issue, 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.

During a regular press briefing day before, official spokesperson of the Ministry of External Affairs 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.

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.

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 by sources. But while the Indian government may not be deterred by Trump's threats, sources said 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, sources said.

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.