India pledges to halt imports of Russian oil. Will all companies limit cooperation with Russia?
9 February 14:36
Imports of Russian oil to India may fall by about half after the conclusion of a trade agreement with the US. This was reported by Bloomberg, according to Komersant. Purchases are expected to gradually decline from an average of 1.2 million barrels per day in January to about half that amount by April.
The White House order stipulates that India must stop direct or indirect imports of Russian oil, and US import tariffs may be increased if supplies resume.
“Russian oil imports to India will fall by about half from already low recent levels after US President Donald Trump issued an order detailing some terms of a trade deal between the two countries,” Bloomberg writes.
According to the agency’s sources, all state and private oil refineries in India, except Nayara Energy Ltd., have suspended purchases of spot cargoes of Russian oil following Trump’s statement on social media.
Although India has confirmed the agreement with the US, details, particularly regarding oil, have not yet been disclosed.
Meanwhile, Nayara Energy, backed by Rosneft, is likely to continue purchasing about 400,000 barrels per day due to its sanctioned status and limited ability to work with other suppliers. Other large companies — Indian Oil Corp., Bharat Petroleum, and Reliance Industries — are not placing new orders for now, leaving only already booked shipments.
Analysts note that after the reduction in Russian oil imports to India, they may stabilize at 400,000-500,000 barrels per day, and the economic benefits of the trade agreement with the US will outweigh the advantages of cheap oil from Russia.
After 2022, India became the main buyer of Russian seaborne oil. At that time, Russia was looking for new markets due to the loss of European demand. Currently, India is significantly reducing its purchases of Russian oil. By March, imports are likely to fall below 1 million barrels per day and may subsequently decline to 500,000-600,000 barrels per day. At the same time, India will increase purchases from other regions, particularly Africa, the Middle East, and South America.
Earlier, on February 2, Trump announced that he had reached an agreement with Indian Prime Minister Modi to stop purchasing Russian oil. According to him, this will help stop the war in Ukraine.
According to the White House, the US and India have reached a framework agreement on mutually beneficial trade, including investment, tariff elimination, and market access.
