Indian refiners cut back on Russian crude purchases in August, turning to Middle Eastern suppliers amid geopolitical risks and potential US tariffs, as overall imports decline and trade dynamics shift.
India’s purchases of Russian crude fell sharply in August, even before the latest US sanctions threat began to weigh on buying decisions. Trade data showed imports from Russia dropped 16.5% month on month to about 2.1 million barrels per day, and preliminary Kpler figures suggest September volumes may ease further to roughly 1.9 million bpd. Russia still remains India’s biggest source of crude, but the direction of travel points to a more cautious approach by refiners as they balance pricing, freight and geopolitical risk.
The shift is being driven less by policy alone than by commercial arithmetic. Indian refiners had already started redirecting their purchases as Middle Eastern supply became more competitive. Imports from Iraq rose about 25% in August to 171,000 bpd, while Saudi shipments increased 1.5% to 328,000 bpd. UAE flows slipped 5.4% to 620,000 bpd, although ADNOC has expanded its ability to move crude from inland fields to export points outside the Strait of Hormuz, giving buyers an alternative route if regional tensions flare.
India’s overall crude imports also softened in August, falling 8.8% to 4.44 million bpd. Earlier reporting by the New Indian Express and Business Standard showed similar patterns in past years, when maintenance outages, shifting discounts and weaker refinery runs pushed Russian intake lower and lifted purchases from other suppliers. The latest data suggest the same commercial logic is at work again, with refiners exploiting spot-market opportunities as they look beyond Russian barrels.
What has changed is the political backdrop. President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act on Friday, giving his administration authority to impose tariffs of up to 100% on goods from countries deemed major buyers of Russian energy. The law does not automatically trigger those duties, but it raises the stakes for Indian refiners if future Russian cargoes become linked to wider trade penalties. That threat helps explain why October and November buying could look different, as companies weigh whether the discount on Russian crude is large enough to offset the risk to exports.
The pressure is also financial. India’s crude import bill climbed 48.4% year on year to $74.8 billion between April and August, even though volumes slipped 0.4%. Higher oil prices and freight costs have eroded much of the savings that came with discounted Russian supply. In that setting, Russian crude may still be economical on its own, but the calculation becomes far less attractive if a lower oil price is offset by the possibility of punitive tariffs on Indian goods sold into the US market.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
