Central government sources confirmed that under the agreement with the US, India will now gradually reduce the purchase of crude oil from Russia. Sources also said refineries like Nayara Energy, which have no other alternative sources, will continue to import for now. Indian refineries will continue to honor purchase agreements made before the announcement, but will not place any new orders after that, three sources familiar with the matter said.
Hindustan Petroleum Corporation Ltd. (HPCL), Mangalore Refinery and Petrochemicals Ltd. (MRPL) and HPCL-Mittal Energy Ltd. Refineries like Oil Corp (HMEL) stopped buying oil from Russia last year soon after the US imposed sanctions on Moscow’s major exporters, while Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd. Other companies like (BPCL) are gradually reducing purchases.
Reliance was the biggest buyer
Reliance Industries Ltd., the biggest buyer of Russian oil, which had halted purchases late last year following US sanctions on Rosneft and Lukoil, will likely stop purchases after recovering 1 to 1.5 million barrels.
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Naira was banned
The only exception under the rule is Nayara Energy. Naira was first banned by the European Union and then by Britain due to its ties with Russia. Rosneft has a 49.13% stake in Naira. Due to these sanctions, no other major suppliers are willing to do any business transactions with the company, resulting in the company being forced to purchase Russian oil from non-sanctioned entities.
Sources said that during talks in December, US trade officials were explained about the refinery situation and that Naira could be given partial exemption from the sanctions policy on the purchase of Russian oil or special arrangements could be made for it. In August last year, America had imposed an additional 25 percent tariff on imports from India for purchasing oil from Russia.
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India’s interests protected by agreement with America
India’s interests have been fully protected in the trade agreement with America. Official sources said that US President Donald Trump has committed to trade worth $500 billion in the next five years. Sources said that Trump forgot to write $500 billion in the next five years in the announcement of the tariff agreement. Officials clarified that this figure is for five years and includes imports of many types of goods like energy, coal, gold, silver, tech, aircraft, data centers.
Government sources on Tuesday sought to clarify the position on key aspects of the trade deal, after Trump’s social media posts raised questions over tariffs, energy imports and strategic autonomy. On oil purchases and purchases from Russia, officials said India has an independent and differentiated import policy and we will continue to follow it. “We always believe in diversifying our import source,” sources said. We do not force any company to buy or not to buy Russian oil. Those who want to buy banned oil buy it.
Response to concerns over increase in imports from America
Responding to concerns over increase in imports from the US, sources said the agreement reflects India’s real needs in critical sectors. “We don’t have Nvidia chips or data centers,” he said. In this our imports will increase and we will import only what we need. Sources said the government has taken security measures on sensitive areas like agriculture and genome crops. Sensitivity has been taken full care of.
