[NEW DELHI] India has not given the country’s oil refiners instructions to stop buying Russian oil, according to sources familiar, days after US President Donald Trump blasted New Delhi for the energy purchases.
No decision has been taken as yet on stopping imports from Russia, the sources said, asking not to be named due to the sensitivity of the matter. Both state-run and private refiners are allowed to buy from their preferred sources, and crude purchases remain a commercial decision made by them, several of the sources said.
Trump rebuked India on Wednesday (Jul 30) for continuing to buy most of its military equipment and energy from Russia. The US leader imposed a surprise 25 per cent tariff on India and threatened an additional penalty for its close ties with Moscow. Two days later, Trump told reporters he “heard” India would no longer be buying oil from Russia, calling it “a good step”.
India has maintained that its energy purchases are driven by market forces and price. Last week, refiners were told to come up with plans for buying non-Russian crude, sources familiar said to Bloomberg. The government asked state-owned processors to prepare an outline of where alternate barrels can be sourced and at what volume if Russian flows get stopped, they said. One of the sources said the instruction amounted to scenario planning in case Russian crude were to become unavailable.
The New York Times reported on Saturday that India will keep buying Russian crude despite a threat of penalties from Trump, citing two senior Indian officials it did not identify.
An oil ministry spokesperson did not reply to messages from Bloomberg seeking comment outside of regular business hours.
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India’s refiners have been singled out by the European Union and the US for supporting Moscow during its war in Ukraine with the oil purchases. It has become the world’s biggest buyer of Russian seaborne exports of crude, soaking up discounted barrels and ramping up its purchases from almost zero to about one-third of its imports.
Reducing or stopping Russian oil purchases would force India to source oil once again from Gulf nations, which costs a premium, and New Delhi is not keen on adding to its import bill, one of the sources said.
Indian Prime Minister Narendra Modi maintains close ties with Russian President Vladimir Putin, having visited the country in October. Putin is scheduled to visit India later this year.
State-owned Indian Oil bought at least five million barrels of US crude, on top of two million barrels of supplies from Abu Dhabi, traders told Bloomberg last week. The purchases were both large and for relatively immediate delivery by the company’s usual standards. BLOOMBERG
