Indian state refiners have stopped buying Russian oil in the past week as discounts narrowed this month and U.S. President Donald Trump warned against purchasing oil from Moscow, industry sources said.
India, the world's third-largest oil importer, is the biggest buyer of seaborne Russian crude.
The country's state refiners - Indian Oil Corp (IOC.NS), opens new tab, Hindustan Petroleum Corp (HPCL.NS), opens new tab, Bharat Petroleum Corp (BPCL.NS), opens new tab and Mangalore Refinery Petrochemical Ltd (MRPL.NS), opens new tab - have not sought Russian crude in the past week or so, four sources familiar with the refiners' purchase plans told Reuters.
Read more: Trump announces 25% tariff on India from Aug 1
IOC, BPCL, HPCL, MRPL and the federal oil ministry did not immediately respond to Reuters' requests for comment.
The four refiners regularly buy Russian oil on a delivered basis and have turned to spot markets for replacement supply - mostly Middle Eastern grades such as Abu Dhabi's Murban crude and West African oil, sources said.
Private refiners Reliance Industries (RELI.NS), opens new tab and Nayara Energy are the biggest Russian oil buyers in India, but state refiners control over 60% of India's overall 5.2 million barrels per day refining capacity.
On July 14, Trump threatened 100% tariffs on countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine.
“While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump wrote. “INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY, STARTING ON AUGUST FIRST.”
Trump did not elaborate on the nature or amount of the additional penalty, but he hinted that it was linked to India’s defense partnerships with Russia. “India has always bought a vast majority of their military equipment from Russia,” he added.
The US president further highlighted the massive trade deficit the United States holds with India, suggesting that the new tariff measures are designed to address the imbalance and force India to open its markets more fairly. “WE HAVE A MASSIVE TRADE DEFICIT WITH INDIA!!!” he added.
