Indian refiners await government advice on Russian oil import halt
- Refiners need time to complete ongoing Russian imports
- Shipments already booked would arrive in March
- S. wants India to shift to Venezuelan, U.S. oil
Indian refiners have not been told by the government to stop buying Russian oil and would need a wind-down period to complete purchases already in process, two refining sources said on Tuesday, following a trade deal with Washington.
While India has slowed Russian oil purchases, refineries have already booked cargoes loading in February and arriving in March, the sources said, declining to be named as they were not authorized to speak with the media.
Trump said the trade deal would slash U.S. tariffs on Indian goods to 18% from 50%, in exchange for India lowering trade barriers, ending Russian oil purchases and importing instead from the United States and potentially Venezuela.
Modi welcomed the tariff reduction but made no mention of halting Russian oil purchases.
Complete halt of Russian imports ‘would hurt Nayara’. India became the top buyer of discounted Russian seaborne crude after Moscow's war in Ukraine began in 2022, spurring a backlash from Western nations that had targeted Russia's energy sector with sanctions aimed at curtailing Moscow's revenue and making it harder to fund the war.
India will gradually cut Russian oil imports, a third source said on Tuesday, adding that a complete halt would hurt operations at Russia-backed Nayara Energy's 400,000-bpd refinery. The plant has relied solely on Russian crude following European Union sanctions on the company last July.
However, Nayara is not planning to load Russian oil in April as it will be shutting its refinery for over a month for maintenance from April 10, the third source added.
Two other refiners have paused new orders in recent days after booking volumes for February and March, industry sources said on Tuesday. One of the sources said his company may delay lifting March cargoes into April to cap India’s overall Russian oil intake.
The sources, declining to be named as they were not authorized to speak to the media, said future purchases would depend on government guidance.
Preparing to scale back Russian imports. Indian Oil Corp., Bharat Petroleum Corp. and Nayara have been regular buyers of Russian oil.
Reliance Industries, which paused buying Russian oil for a month, will buy up to 150,000 bpd from February, a company executive said last week.
The four companies and India's oil ministry did not respond to emails seeking comment.
Last week, sources said that India was preparing to reduce Russian oil imports to < 1 MMbpd, with one saying such imports eventually would total 500,000 bpd–600,000 bpd.
India's Russian oil imports peaked at around 2 MMbpd last June.
Trump said on Saturday India would buy Venezuelan oil, but refining sources said on Tuesday that only Reliance and Nayara had the refining capability to process heavy crude in large volumes. State refiners, they said, could not simply switch to Venezualan oil and would only be able to replace less than 10% of Russian supplies.
India's Russian oil imports fell to their lowest level in two years in December, data from trade sources showed.
Indian refiners have been buying more from Middle Eastern, African and South American countries as they scale back Russian oil purchases, refining sources said last month.
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