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Kolkata: India continues to buy crude from Russia solely on economic considerations and they have received no directions to cut down on buying from that country subsequent to US President Donald Trump slapping 25% additional tariff on Indian goods because of buying crude from Russia, Indian Oil Corporation chairman A S Sahney has said. Sahney stated that buying of Russian crude fluctuates monthly depending on the discounts on the Russian crude grades like Urals and while the discount had reached $40 per barrel, they have reduced to about $1.5 in July but has now jumped to $2.70.
"There is no pause... We continue to buy, purely based on economic considerations, that is to say if the pricing and characteristics of the crude make sense in our scheme of processing, we buy... No special effort is being made to either increase or decrease (the import volumes). We are buying crude as per economic considerations," Sahney was quoted as saying.
Significantly, the US retaliatory tariff of 50% on import of goods from India and Trump's demand that New Delhi backs out from buying Russian crude is a topic that has been in focus in India's economic policymaking over the past few weeks.
Significantly, New Delhi has lashed out at Donald Trump's decision to impose an additional 25% tariff on Indian goods on the ground that India buys "massive amounts" of crude from Russia. The Indian government has described Trump's decision as "unjustified" and has said it will protect the nation's economic interests.
Against this backdrop, SBI Research, a thinktank of State Bank of India, projected that even if India stopped buying crude from Russia, the impact would be about $9 billion in FY26 and $11.27 billion in FY27. "Russia accounts 10% of global crude supply. If all the countries stopped buying from Russia, crude price may increase by 10% if no other countries increase their production," SBI Research also mentioned in a note on August 9.
New Delhi began sourcing more and more crude from Russia after 2022, when Russian troops attacked Ukraine and Moscow faced sanctions from the west. They began massive discounts to the crude which India picked up eagerly to cut on its oil import bill. "Consequently, from merely 1.7% share in total oil imports in FY20, Russia's share has increased to 35.1% in FY25 and it is now the biggest oil importer for India. In terms of volume, India imports 88 MMT from Russia in FY25 from the total import of 245 MMT," SBI Research mentioned in the note.
The IOC chairman said that there was no sanctions on Russian crude. "India has not done anything that violates any sanctions," he said. According to reports, Bharat Petroleum Corporation Ltd Director (Finance) Vetsa Ramakrishna Gupta also said on an investor call that discounts on Russian crude have narrowed to $1.5 per barrel which caused lower imports in July. In Q1 (April-June) of FY26, Russian oil constituted 34% of BPCL's crude purchase. It hopes to return to the 30-35% level.
In FY20, Russian crude constituted 1.7% of crude imports into India. Iraq was at the top with 22.2%. In FY23, imports from Russia constituted 19.1% of Indian imports and Iraq was a 20.7%. In FY25, Russia rose to 35.1% while Iraq was a distant second at 19.1%. In FY20, the US accounted for 4.8% of Indian crude imports. In FY25, it was at 4.6%.
