Indian Refiners Cut Russian Crude Amid US Trade Pact Push

In a significant shift for global energy markets, Indian refiners have recently begun shunning Russian crude oil for April deliveries, signaling a strategic move to support landmark trade agreements with the United States. Industry insiders and Reuters reports indicate that major players including Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Reliance Industries have declined offers of Russian crude scheduled for March and early April exports.

The pivot is closely tied to new bilateral framework deals between India and the US, which aims to slash tariffs and deepen economic integration by 2026. While existing commitments in March will be honored, it’s clear that new acquisitions are significantly halted.

This move coincides with President Donald Trump’s recent announcement rescinding a 25 percent tariff on Indian goods previously imposed due to India’s continued purchase of Russian oil. The US leader stated that the relief was granted because New Delhi had “committed to stop directly or indirectly” buying from Moscow.

Although the official joint statement did not explicitly mention energy, the move underscores India’s evolving stance and economic priorities. Historically, India has been the primary destination for discounted seaborne crude from Russia since 2022’s Ukraine invasion. However, recent data show a steady decline in these volumes, with Indian imports expected to drop below 1 million barrels per day (bpd) by March, marking a sharp decrease from pre-peak levels of over 2 million bpd in 2025.

In response, Indian refiners are increasingly turning to the Middle East, Africa, and potential sources like the US and Venezuela to mitigate supply gaps. Analysts suggest that this transition is part of broader efforts to insulate India’s economy from US sanctions while securing preferential trade with Washington.

Despite some exceptions, such as Nayara Energy, which could continue importing Russian crude given limited sourcing options under EU sanctions, the industry-wide shift toward alternative markets highlights India’s strategic realignment in energy sourcing.